Transfer of equity Stamp Duty
Discussion
Afternoon all,
Has anyone removed a partner from the deeds of a jointly owned house that is also mortgaged? (This is being done with both parties knowledge and agreement of course!)
From what I can see, i'd need agreement from the mortgage company, and then there may be some stamp duty to pay. The house is worth 370k with a mortgage of 220k. Reducing the ownership from 2 people down to 1 means there would be a transfer of equity of 150k, with the sole person taking on an additional 110k share of the mortgage.
So the SDLT due would be on 150/2 = 75k plus the 110k, so stamp duty would be due on 185k so a bill of £1,200 to pay?
Does this sound about right?
Does this really need a solicitors involvement as well or can it be done DIY with the land registry/mortgage company/stamp duty forms?
Thanks
Has anyone removed a partner from the deeds of a jointly owned house that is also mortgaged? (This is being done with both parties knowledge and agreement of course!)
From what I can see, i'd need agreement from the mortgage company, and then there may be some stamp duty to pay. The house is worth 370k with a mortgage of 220k. Reducing the ownership from 2 people down to 1 means there would be a transfer of equity of 150k, with the sole person taking on an additional 110k share of the mortgage.
So the SDLT due would be on 150/2 = 75k plus the 110k, so stamp duty would be due on 185k so a bill of £1,200 to pay?
Does this sound about right?
Does this really need a solicitors involvement as well or can it be done DIY with the land registry/mortgage company/stamp duty forms?
Thanks
MrChips said:
Reducing the ownership from 2 people down to 1 means there would be a transfer of equity of 150k, with the sole person taking on an additional 110k share of the mortgage.
Is the person giving up their share going to be paid for it? If no money changes hands then there's no stamp duty.Jobbo said:
Sheepshanks said:
Is the person giving up their share going to be paid for it? If no money changes hands then there's no stamp duty.
Not correct - there's SDLT based on the share of the debt which has been taken on.MrChips said:
Dan_M5 said:
Didn't even know you had to pay stamp duty if you take 100% possession. Ah only if your married you don't have to
We are married (and staying married!) if that make a difference!Edited by Dan_M5 on Tuesday 6th June 13:24
Sheepshanks said:
Didn't know that. So in that case he only has to be concerned about the £110K, and that falls below the threshold anyway.
Indeed - below the threshold, but beware if the person owns any other property because then you'll be caught by the 3% surcharge for owning multiple dwellings.
Jobbo said:
Go and get some advice specific to you - if you're staying together, though, why take one person off the title?
The only reason i could see is it works out cheaper as she could buy another property that is worth a lot more and not attract the 3% stamp duty and get incentives as a first time buyerDan_M5 said:
The only reason i could see is it works out cheaper as she could buy another property that is worth a lot more and not attract the 3% stamp duty and get incentives as a first time buyer
If you're married, it's irrelevant - you're subject to the extra 3% SDLT if your spouse owns a property in his or her sole name, even if you have no other property in your own name.DocJock, I think that's very much the time you'd want some proper advice!
Long story short is that MrsChips has stupidly missed a few credit card payments so we're finding it hard to remortgage our BTL. A few calls has aluded to the ability for me to pass the application criteria and do it all under a sole name.
So nothing dodgy really, and all with mrs consent we're looking at removing her from the deeds so I can apply on my own.
Land registry seems to suggest it's almost a DIY application except for identity checks with our solicitor, but it's not clear on whether that's really the case or if there is any advantage to removing her whilst still on current mortgage, or doing it all as part of the remortgage.
All of this is assuming you can't apply in a sole name when the deeds aren't solely yours, even if you have consent of the other party named on the deeds.
Stupid situation really but that's where we are st the mo!
So nothing dodgy really, and all with mrs consent we're looking at removing her from the deeds so I can apply on my own.
Land registry seems to suggest it's almost a DIY application except for identity checks with our solicitor, but it's not clear on whether that's really the case or if there is any advantage to removing her whilst still on current mortgage, or doing it all as part of the remortgage.
All of this is assuming you can't apply in a sole name when the deeds aren't solely yours, even if you have consent of the other party named on the deeds.
Stupid situation really but that's where we are st the mo!
You can't make any application to the Land Registry to transfer the property into your sole name, or anyone else's name, while there's a mortgage on it. There will be a restriction on the title preventing it.
So you need to do it as part of the remortgage. There has to be a solicitor involved to hold the new mortgage money and pay off the current mortgage with it.
You can't register a transfer into different name/s without sending the SDLT form submission receipt to the Land Registry, so that picks up the point above - you'll have to pay SDLT based on 3% of half the outstanding mortgage balance.
Awkward, annoying, yes - the SDLT system is a pain now. I'm having to pay a silly sum to stick my house into a company wholly owned by me. There's no way round it so build it into your calcs.
So you need to do it as part of the remortgage. There has to be a solicitor involved to hold the new mortgage money and pay off the current mortgage with it.
You can't register a transfer into different name/s without sending the SDLT form submission receipt to the Land Registry, so that picks up the point above - you'll have to pay SDLT based on 3% of half the outstanding mortgage balance.
Awkward, annoying, yes - the SDLT system is a pain now. I'm having to pay a silly sum to stick my house into a company wholly owned by me. There's no way round it so build it into your calcs.
Ok so i've run the sums again and we are going to look to remortgage and transfer equity at the same time. Solicitor has confirmed the stamp duty as above is based on half the mortgage so 3.3k. If the remortgage to Santander 1.44% doesn't go through then we'll keep for a few months and then review again!
Gassing Station | Finance | Top of Page | What's New | My Stuff