Stamp duty for a couple (1 first time buyer, 1 2nd timer)

[EB89]

Wondering if anyone has any knowledge to help me out...

My girlfriend has never bought a property before and I have.

We're looking at buying together and wondered if there's any way to not just pay the full whack of stamp duty with my girlfriend being a first time buyer? (Paying half would feel a bit better to still give my girlfriend the first time buyer benefit)

From a bit research it seems a route could be a Joint Borrower, Sole Proprietor mortgage. It takes both incomes into consideration with relation to affordability, however there would only be one person named on the deeds. (My girlfriend, first time buyer)

This then leaves the property wholly, legally in my girlfriends name which doesn't feel entirely comfortable for me. So I'm not sure if I could then be transferred my half of the property with a big stamp duty liability?

Edit: For clarity, I own a property in my sole name at present - acquired prior to current relationship and I'll be selling this to part fund the new home together.

Edited by EB89 on Sunday 10th July 19:27

[ChocolateFrog]

Why would you do that to save what I'm assuming is a couple of grand at most?

You'd have to be mad.

[EB89]

Stamp duty on a 400k property would be £10k

If it where a couple of grand then I'd not be too bothered. But up to 10k saving feels like it's worth looking into.

[Rob_125]

Just pay the stamp duty, its worth it for the feeling of security and minimising the legal complications. (What happens when you want to be put on the deeds, more solicitor involvement and no doubt an element of SD to pay). We would have been in the exact same position last year, had it not been for the stamp duty holiday.

Edited by Rob_125 on Sunday 10th July 17:03

[AAD44H]

As above, would get really complicated if anything happened between the two of you and you will then have to pay legal fees when you come to change to joint ownership anyway. Just pay it.

[whatxd]

EB89 said:

Stamp duty on a 400k property would be £10k

If it where a couple of grand then I'd not be too bothered. But up to 10k saving feels like it's worth looking into.

Only if it'll be the only property you own. If you already own a property and this purchase would mean you own an additional property, you pay a higher rate of stamp duty.

This is exactly what happened to me, got a BTL and then 10 years later when I bought a house with my wife, found out I had to find £8k in stamp duty that I wasn't expecting. Didn't matter that my wife was a first time buyer which you'd think would at least allowed us to pay the normal rate rather than the higher rate.

Stamp duty would be £22k for a £400k house that's an additional home. F U fake Conservative government with your tax increases across the economy.

[dmahon]

I do wonder if it would work though. Buy in one persons name with some kind of deed of trust or later transfer of equity.

Buying in one persons name to get the stamp duty incentive doesn’t sound that funky if you can finance the property.

[gotoPzero]

EB89 said:

This then leaves the property wholly, legally in my girlfriends name which doesn't feel entirely comfortable for me.

There is your answer.

Its £400k. If something goes wrong you are going to get wrecked.

[EB89]

dmahon said:

I do wonder if it would work though. Buy in one persons name with some kind of deed of trust or later transfer of equity.

Buying in one persons name to get the stamp duty incentive doesn’t sound that funky if you can finance the property.

That's more like it! Now I just need to figure it out ...

I know of someone that has reportedly done it, but I'm not close enough to probe around.

Ultimately I could be tempted to have the property just in her name for a while. We have every reason to trust eachother...it would just all feel a bit better if we could be legally/ contractually 50/50 on the home - it wouldn't even have to be at point of purchase, just somewhere within a year or so.

Or even, I wouldn't mind paying 50% of full stamp duty in the basis of purchasing with a first time buyer.

It just feels a bit harsh having to pay the full stamp duty to the tune of 10k when my partner is a first timer.

[Percy Cushion]

OP, you say you’re not a first time buyer, that’s fine, but do you still own another property? That would have a direct impact on the stamp duty of this home.

[EB89]

Percy Cushion said:

OP, you say you’re not a first time buyer, that’s fine, but do you still own another property? That would have a direct impact on the stamp duty of this home.

Good point - To clarify, I own my own home at present but will be selling this and rolling the funds into the joint purchase.

[Percy Cushion]

EB89 said:

Percy Cushion said:

OP, you say you’re not a first time buyer, that’s fine, but do you still own another property? That would have a direct impact on the stamp duty of this home.

Good point - To clarify, I own my own home at present but will be selling this and rolling the funds into the joint purchase.

So in terms of stamp duty, you aren’t being penalised, you’re only asking to pay what is due. To suggest avoiding this and putting the property in your partners name only is highly risky.

[T6 vanman]

https://www.gov.uk/stamp-duty-land-tax/residential...

[Caddyshack]

The joint borrower sole proprietor does work and avoids the stamp duty. You can still use a deed of trust and proving you have paid to maintain the mortgage gives you rights to the property too. It isn’t as water tight as joint owners but as long as handled properly it can work.

[EB89]

Caddyshack said:

The joint borrower sole proprietor does work and avoids the stamp duty. You can still use a deed of trust and proving you have paid to maintain the mortgage gives you rights to the property too. It isn’t as water tight as joint owners but as long as handled properly it can work.

Thanks Caddyshack,

What do you know or what are your thoughts on making it a bit more water tight later down the line? IE doing the above to start with, then later down the line moving to more regular joint deeds and ownership?

[Caddyshack]

EB89 said:

Caddyshack said:

The joint borrower sole proprietor does work and avoids the stamp duty. You can still use a deed of trust and proving you have paid to maintain the mortgage gives you rights to the property too. It isn’t as water tight as joint owners but as long as handled properly it can work.

Thanks Caddyshack,

What do you know or what are your thoughts on making it a bit more water tight later down the line? IE doing the above to start with, then later down the line moving to more regular joint deeds and ownership?

I have not seen that done yet, but
When you do a transfer of equity to add a party to the deeds the solicitor must do a calc to see what stamp duty is then payable.

[Puzzles]

How much extra in legal fees is this going to cost?