Stamp Duty - Existing home owner + fiancee (FTB)

B

bigbadpaw

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Hi all...
(I'm sure this question must have been answered already but can't seem to find it)

My fiancee and I have gotten mortgage approval as of last week and are hoping to buy soon. I already own a house, and my Fiancee is a first time buyer. I am told by a few people that we would only have to pay half the stamp duty.
Could someone please confirm whether this is true or not?
Thanks a mill...
 
Not true if you both buy the house - all parties must be FTBs to avail of the lower stamp duty rates. You (or, rather she) would be entitled to FTB mortgage tax relief and that would be apportioned based on what proportion of the interest on the mortgage you both pay.
 
Hi I'm in the same situation - I own a house & now my fiance wants to buy. Someone told me that he can buy in his own name, even if we were married, and still be an FTB so avoid Stamp Duty. Is this true? And if it is: when we get married what happens re having two homes, does one have to be nominated officially as the couple's PPR?
 
If your fiance buys in his own name (i.e. sole name on house deeds and mortgage) then you have zero rights to the house. He would also have to make all the mortgage repayments. As far as I know, if he buys on his own, then he still is an FTB for stamp duty purposes. Don't know what happens when you get married but it may be just that the house can then be transferred into both your names as part of that (no stamp duty payable on transfers between spouses).

I can't imagine that each member of a married couple can nominate different houses as PPRs, but I've really no idea on that one. If you are living together, then of course, you have the same PPR.

If I was you, I'd ask a financial advisor. Often times, when you hear the answer you want, it's hard to shake it, even if the person giving you the answer may not have sufficient knowledge or information to back it up. At the end of the day, if you got it wrong, you could be liable for the full stamp duty (and potentially interest and penalties if the Revenue took a dim view of it), so unless the "someone" that told you that it was all fine and no stamp duty was payable was an independent financial advisor, I'd dig deeper into the whole question and get a definitive answer from a qualified person.

Sprite
 
@D4Chick -

It may be possible for him to buy in his own name and qualify for a stamp duty exemption. However, there are a number of issues to consider:
(1) He may not qualify for a mortgage on his own;
(2) You could not be on the deeds of the house for a substantial period;
(3) If you contribute anything to the purchase or to the mortgage, he will not qualify for the stamp duty exemption (see this thread and referenced documents http://www.askaboutmoney.com/showthread.php?t=106768&highlight=stamp+duty).

If, however, both of you and Revenue (!) are happy with him to be sole owner of the house with you making no financial contribution, it may well be legal tax avoidance, as distinct from evasion.

Married couples are generally deemed to be living together - if your current house is a PPR all you'll need to do is cease claiming mortgage interest relief and have it moved to the new house. Note that this will probably raise Revenue eyebrows!

+1 on seeking good tax advice on this, and probably legal advice too.
 
Thanks guys - will take your advice and get a tax/legal expert to advise!
 
i was in the same situation and we had to pay the full stamp duty, only way around it is to put the new house in your girlfriends name.
 
Hi Watersprite...finally caught up with my brother and what he advised..

If we both get the mortgage in both our names (though my fiancee puts up full deposit), then mortgage repayments come out of her account, i dont pay anything, i dont live in the house, I live in my house(PPR), i dont contribute to the 2nd house...you see what i'm getting at. He reckons he did it, it worked and either (a) it was fine to do so with revenue or (b) he just got away with it.
I'd be interested in your thoughts on this scenario....and i promise...no more about it after this ;)
bbp.
 
I know that having both parties on the deeds means that, if one is not an FTB, then neither are. I don't know if you can have one person on the deeds, two people on the mortgage... Even aside from the SD question, will banks even do that? I didn't think so, but stand to be corrected.

I don't know from your reply above if you are suggesting an arrangement that doesn't conform with reality (apologies - but it's hard to read nuances into email). If you are saying (in all seriousness) that you will not be on the deeds, not contribute to the mortgage, not live there and not pay your financee anything, then it may be possible for her to claim FTB status (this is not my area of expertise so you really should talk to an advisor before embarking on this path)

If you are, instead "saying" that (to Revenue) and it's not actually the case, then I'll sign off here.

Dreamerb's response above puts the whole thing well.
 
I curently own my own house. I am now looking to buy a house with my g/f. I was hoping to have the mortgage in both our names but the house in her name only with a legal agreement in place should anything go wrong in the future. The aim of this was to avoid paying the SD. We would then claim the TRS under her name only on the mortgage.

I have been on the revenue website and it states that "To qualify for the relief the entirety of the purchase monies, including any borrowings, must be provided by the first time buyer. Any person, who provides part of the purchase monies or who is a party to any borrowings relating to such purchase, is also regarded as a buyer of the house and the relief will not be available unless that other person is also a first time buyer."

It would apear from this that what I was thinking is not possible. We were planning on keeping the current house for the time being and rent it out, maybe selling it in a year if it is a struggle.

Anyone have any further thoughts on this??
 
I've researched this in a lot of detail. The only sure way I can see to legally avoid stamp duty is for the FTB to buy it on their own with zero assistance from the non-FTB i.e. only the FTB on the mortgage and deeds.

In practical terms this means the FTB would need to be able to secure the entire deposit with no help from the non FTB and qualify for the entire mortgage on their own income.
 
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