Advice please - Stampduty Clawback query

[Dave_1]

Hi all

I have a question about stamp duty clawback that I'd appreciate some advice on. Its a bit complicated.........

I bought an apartment with my brother 2 years ago that we both live in.
I am now in a position where I want to buy a house with my girlfriend. The house we will be buying is new and under 125sq. metres and we will be owner occupiers so there is no stamp duty.

However, the apartment I bought with my brother was also new and therefore we did not pay stamp duty on it. So what is the situation if I buy a new house and move out??

Will the stamp duty on the apartment be open to clawback?? And if so, how will this affect my brother?? If he remains in the apartment then he is not liable for stamp duty, but can he be seen as an owner occupier and me as an investor?? The property and mortgage are in both our names. So will the revenue claw back the stamp duty on my 'half' of the property, or look to clam for the full amount??

From reading the threads here, I presume I will be looked on as an investor and there will be a clawback, but as my brother will remain an owner occupier, it would be unfair if he were also liable for stamp duty on his 'half' of the property.

Also, I rang the revenue stamp duty line to query this. they said that as long as we didn't receive any rent there would be no clawback as he would still be living there. But I don't know if thats true as its no longer my main residence!

CONFUSED!!!

 

[ClubMan]

Will the stamp duty on the apartment be open to clawback??

Clawback only applies where a property bought as an owner occupier is rented out within five years of purchase. This does not seem to be the case here. The eventual sale of your share in the property will be assessable in part for CGT unless you dispose of it within 12 months of moving out.

However you probably need to get independent, professional advice to be sure.

 

[Dave_1]

Hi Clubman,

thanks for replying. I was hoping that was the case allright. We're not renting it out. My worry was due to the fact that it won't be my principal residence anymore. Do you think this will have any effect??

And sorry, one other query. I take it I need to cancel my mortgage interest relief for the first property when I move out, and re-apply then for the new house when I move in??

 

[ClubMan]

My worry was due to the fact that it won't be my principal residence anymore. Do you think this will have any effect??

No SD clawback applies unless the property is rented out within five years of purchase as an owner occupier. Obviously CGT may evenetually be an issue and you cannot continue to claim owner occupier mortgage interest tax relief on your portion of the mortgage interest but no SD implications as far as I can see.

And sorry, one other query. I take it I need to cancel my mortgage interest relief for the first property when I move out, and re-apply then for the new house when I move in??

Yes. Note that you will only be entitled to non FTB rates of mortgage interest relief even if your partner is entitled to FTB rates.