"Second Home" stamp duty
"Second Home" stamp duty
Author
Discussion

David A

Original Poster:

3,725 posts

281 months

Tuesday 23rd January 2018
quotequote all
A slightly odd scenario:

Person A owns House 1
Person A lives with Person B in house 1, main and only residence
Person B is on the mortgage of house 2 with Person C - this was purely so self employed person C could get a mortgage.
Person B has never contributed to house 2, never lived there etc
Person A and B are looking to sell house 1 and move and buy a house


Would this cause the higher stamp duty on a "second home" to be invoked?

The challenging issue is person C getting a mortgage and getting person B off that one, but thats something else altogether.

Jockman

18,414 posts

190 months

Tuesday 23rd January 2018
quotequote all
Does person B own the property with person C or just on the mortgage?

David A

Original Poster:

3,725 posts

281 months

Tuesday 23rd January 2018
quotequote all
Jockman said:
Does person B own the property with person C or just on the mortgage?
I'm not 100% sure, whats the definition of "own" i.e. what do I need to ask / dig out paper work wise?

Sarnie

8,373 posts

239 months

Tuesday 23rd January 2018
quotequote all
Yes.

Person B currently owns 1 property and after the proposed purchase will own 2 properties.......hence the additional stamp duty.

Jockman

18,414 posts

190 months

Tuesday 23rd January 2018
quotequote all
David A said:
Jockman said:
Does person B own the property with person C or just on the mortgage?
I'm not 100% sure, whats the definition of "own" i.e. what do I need to ask / dig out paper work wise?
Are they on the deeds?

David A

Original Poster:

3,725 posts

281 months

Tuesday 23rd January 2018
quotequote all
Jockman said:
David A said:
Jockman said:
Does person B own the property with person C or just on the mortgage?
I'm not 100% sure, whats the definition of "own" i.e. what do I need to ask / dig out paper work wise?
Are they on the deeds?
I will check !

Sarnie said:
Yes.

Person B currently owns 1 property and after the proposed purchase will own 2 properties.......hence the additional stamp duty.
Is that really the case though - I thought there was something about a main residence which for Person B would be House 1 albeit they are not on the mortgage/deeds for that....

Sarnie

8,373 posts

239 months

Tuesday 23rd January 2018
quotequote all
David A said:
Is that really the case though - I thought there was something about a main residence which for Person B would be House 1 albeit they are not on the mortgage/deeds for that....
If person B owned a main residence and was selling it and buying another, then the additional stamp duty wouldn't be payable...........person B owns one property currently and will own 2 once the new purchase completes.....hence the additional stamp............

David A

Original Poster:

3,725 posts

281 months

Tuesday 23rd January 2018
quotequote all
Sarnie said:
David A said:
Is that really the case though - I thought there was something about a main residence which for Person B would be House 1 albeit they are not on the mortgage/deeds for that....
If person B owned a main residence and was selling it and buying another, then the additional stamp duty wouldn't be payable...........person B owns one property currently and will own 2 once the new purchase completes.....hence the additional stamp............
So it makes no bearing if the house person B "owns" (still need to check if on deeds or just mortgage and does that make a difference) is not and has never ever been a residence for them in any way?

Jobbo

13,848 posts

294 months

Tuesday 23rd January 2018
quotequote all
David A said:
So it makes no bearing if the house person B "owns" (still need to check if on deeds or just mortgage and does that make a difference) is not and has never ever been a residence for them in any way?
On the contrary - it does have a bearing: it's not their main residence so they're always going to have to pay the 3% surcharge SDLT on any additional residential property purchase, whether or not that is to be their main residence.

You can't be on the mortgage but not on the title deeds, though you could be just guarantor (not owner) so do check that.

David A

Original Poster:

3,725 posts

281 months

Tuesday 23rd January 2018
quotequote all
Jobbo said:
David A said:
So it makes no bearing if the house person B "owns" (still need to check if on deeds or just mortgage and does that make a difference) is not and has never ever been a residence for them in any way?
On the contrary - it does have a bearing: it's not their main residence so they're always going to have to pay the 3% surcharge SDLT on any additional residential property purchase, whether or not that is to be their main residence.

You can't be on the mortgage but not on the title deeds, though you could be just guarantor (not owner) so do check that.
And if you're just the guarantor then there is no extra stamp duty?

Jobbo

13,848 posts

294 months

Tuesday 23rd January 2018
quotequote all
If you are guarantor and don't own the property, you don't own the property - that's it.

David A

Original Poster:

3,725 posts

281 months

Tuesday 23rd January 2018
quotequote all
£3 to land registry and persons B AND C are on the deeds, guess B isn't getting a name on the new house !


NickCQ

5,392 posts

126 months

Tuesday 23rd January 2018
quotequote all
IIRC the only time when ‘main residence’ is relevant in this situation is when someone already with two properties sells one and buys another. Then, if you are selling a main home to buy a main home, no surcharge. If you are selling a second home to buy a second home, 3% surcharge.

Jockman

18,414 posts

190 months

Tuesday 23rd January 2018
quotequote all
NickCQ said:
IIRC the only time when ‘main residence’ is relevant in this situation is when someone already with two properties sells one and buys another. Then, if you are selling a main home to buy a main home, no surcharge. If you are selling a second home to buy a second home, 3% surcharge.
So long as it's done simultaneously Nick otherwise 3% Enhanced Rate is due even on a main residence. You then have 3 years? to sell the original main residence and claim the duty back.

STattam

119 posts

247 months

Tuesday 6th February 2018
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Providing b and c agree could a trust not be declared that they are both holding for c upon bare trust and so b having no beneficial interest hence c becoming the qualifying person for sdlt purposes (amongst others). If extra 3% was paid if purchase was in new sdlt regime then trust would have needed to have been in place at purchase. Care need also with regard to the mortgage company's terms.