SDLT change - joint buyers
Discussion
I am considering helping a family member purchase a house, and was thinking the best way to do this would be for us to purchase the house as tenants in common, with me taking a share, say 25%. They'd eventually want to own the whole house, so if/when then can, they would re-mortgage and purchase my share at market rate (details TBA, still need to check if they'd even get a mortgage on that basis for their 75% share).
But my question is about the new SDLT for 'buy to let' or second home owners. They currently rent so this will be their only home (they have owned in the past so are not technically 'first time buyers' if that matters). I am not going to live there, and I already own my own house.
Would I be liable for the additional 3% on my own share, or would it somehow be payable for the whole house? If it is due on my 25% share, does that mean they are only paying SDLT on their 75% share, at the rate of that 75% value of the house?
Thanks for any insight. It might be cheaper/easier for me to just loan them the money but that doesn't leave me with as much security as having my name on the deeds.
But my question is about the new SDLT for 'buy to let' or second home owners. They currently rent so this will be their only home (they have owned in the past so are not technically 'first time buyers' if that matters). I am not going to live there, and I already own my own house.
Would I be liable for the additional 3% on my own share, or would it somehow be payable for the whole house? If it is due on my 25% share, does that mean they are only paying SDLT on their 75% share, at the rate of that 75% value of the house?
Thanks for any insight. It might be cheaper/easier for me to just loan them the money but that doesn't leave me with as much security as having my name on the deeds.
It looks like,
As discussed elsewhere, the final detail of SDLT changes are awaited. The Consultation paper said,
"The government proposes that if, at the end of the day of a transaction, any of the joint purchasers has two or more properties and is not replacing a main residence, the higher rates will apply to the entire consideration for the transaction. This provides simplicity and aligns with other areas of the tax system."
- If you already own a property the higher rate would be payable on the whole of the original purchase. (see below)
- When your 25% is eventually sold to the majority owner they would pay the normal lower rate of stamp duty.
As discussed elsewhere, the final detail of SDLT changes are awaited. The Consultation paper said,
"The government proposes that if, at the end of the day of a transaction, any of the joint purchasers has two or more properties and is not replacing a main residence, the higher rates will apply to the entire consideration for the transaction. This provides simplicity and aligns with other areas of the tax system."
The proposed SDLT changes are a total crock of s
t that is skewing the property market to hell right now.
They have been badly thought out (if at all) and obviously no one actually spoke to anyone legally qualified who deals with property before the consultation that ended on 1st February.
The Government is looking at this totally the wrong way. If they want to cash in on BTL profits (more than they do already via the existing tax system) they should simply add 1/2%pa none tax deductible charge to the outstanding balance of any BTL mortgage on 4th April each year. Doing what they are doing is only going to reduce supply of rental properties and increase rents.
t that is skewing the property market to hell right now.They have been badly thought out (if at all) and obviously no one actually spoke to anyone legally qualified who deals with property before the consultation that ended on 1st February.
The Government is looking at this totally the wrong way. If they want to cash in on BTL profits (more than they do already via the existing tax system) they should simply add 1/2%pa none tax deductible charge to the outstanding balance of any BTL mortgage on 4th April each year. Doing what they are doing is only going to reduce supply of rental properties and increase rents.
MickC said:
I am considering helping a family member purchase a house, and was thinking the best way to do this would be for us to purchase the house as tenants in common, with me taking a share, say 25%. They'd eventually want to own the whole house, so if/when then can, they would re-mortgage and purchase my share at market rate (details TBA, still need to check if they'd even get a mortgage on that basis for their 75% share).
But my question is about the new SDLT for 'buy to let' or second home owners. They currently rent so this will be their only home (they have owned in the past so are not technically 'first time buyers' if that matters). I am not going to live there, and I already own my own house.
Would I be liable for the additional 3% on my own share, or would it somehow be payable for the whole house? If it is due on my 25% share, does that mean they are only paying SDLT on their 75% share, at the rate of that 75% value of the house?
Thanks for any insight. It might be cheaper/easier for me to just loan them the money but that doesn't leave me with as much security as having my name on the deeds.
Depending on how their lenders feel, it would be easier to put a second charge on it, however if the mortgage Co see this as you lending them the deposit it probably won't flyBut my question is about the new SDLT for 'buy to let' or second home owners. They currently rent so this will be their only home (they have owned in the past so are not technically 'first time buyers' if that matters). I am not going to live there, and I already own my own house.
Would I be liable for the additional 3% on my own share, or would it somehow be payable for the whole house? If it is due on my 25% share, does that mean they are only paying SDLT on their 75% share, at the rate of that 75% value of the house?
Thanks for any insight. It might be cheaper/easier for me to just loan them the money but that doesn't leave me with as much security as having my name on the deeds.
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