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F E Smith
F E Smith, Advocate
Category: Property Law
Satisfied Customers: 10728
Experience:  I have been practising for 30 years.
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I am currently on the mortgage with my partner but am

Customer Question

I am currently on the mortgage with my partner but am looking to buy a new property in my sole name as I need security for myself and my daughter. I intend on letting my partner move in with me and maybe if things recover allow him to go on the mortgage. We would like to take me off the existing house, release my share of the equity and let the house out. Are we liable for second property stamp duty?
Submitted: 3 months ago.
Category: Property Law
Expert:  F E Smith replied 3 months ago.

Hello for clarification - how long have you been together and in the home?

who pays the mortgage?

can you both afford the mortgage solely?

Customer: replied 3 months ago.
We have been together for 17 years but are going through difficult time and worried about security for us both. The house I’m buying will be with just me on the mortgage and I will be using the equity releases from the existing home and coming off the mortgage. He wants to still own a home so intends on letting the existing house he will own in just his name
Expert:  F E Smith replied 3 months ago.

So just ignoring the relationship problems and who is going to live where, you are going to be released from the current mortgage and you are going to take out another mortgage? Is that it in simple terms?

For building society financial purposes, is your current partner financially okay to be on the mortgage on his own or to be on a new mortgage on the existing property?

How much is current mortgage?

If you are going to move into another property and allow him to go on the new mortgage, would you be going back onto the old mortgage? If not, why are you putting him on the new mortgage if you have relinquished your interest in the old property?

Customer: replied 3 months ago.
I am coming off of the existing mortgage and getting the new mortgage with just my name.He can get a buy to let mortgage in his name and give me the money to buy me out and take me off of the mortgage...I have no intention of going on the buy to let mortgage and am unsure if he will be put on my mortgage... depends but not for at least 5 years as I will get a long term fixed rate mortgage.He will not be on the new mortgage, he will just live with me. I am financially independent and will not need him to contribute to the bills. Also, the rental income he earns from the house being let will be for himself and we intend on him being the only person who declares it on self assessment and pays tax on it. I will not be associated with the property once he has taken me off the mortgage and given me my share of the equity.
Expert:  F E Smith replied 3 months ago.

If the mortgage on the existing property is over £250,000, there is stamp duty to pay on the transfer of that property from 2 names to one name. That’s why I asked how much the existing mortgage was.

Provided you are not on the deeds of the existing property at the time you buy the new property, then it isn’t a second property.

If you are still on the deeds of the existing property at the time you buy the new property, you would pay stamp duty at the increased rate but if you came off the old property within 3 years, you would be able to recover it.

The rules are far from straightforward and here is a bit of clarification: https://www.blakemorgan.co.uk/training-knowledge/features-and-articles/stamp-duty-land-tax-3-surcharge/

Can I clarify anything else for you?

I’m happy to answer any specific points arising from this.

Please take a moment to look at the top right hand corner of the page and rate my service by clicking one of the stars at the top of the screen. It’s important you use the rating service because that gives me credit. It doesn’t just give me a pat on the head! (Although there is an incentive scheme where the more five-star ratings I get, I do actually get a pat on the head! :-)) All you need to do is press Submit. Thank you.

If you still need any point clarifying, I will still reply because the thread does not close.

Best wishes.

FES.

Customer: replied 3 months ago.
The old property is valued at £330000 and we have a mortgage of £137000 i am looking to have my 50% share of the house. Would he pay stamp duty on this?My new house will be £470000 if I am still on the mortgage of the buy to let I will have to pay extra tax? Will I also be liable for higher rate tax on rental income until I am off of the mortgage
Expert:  F E Smith replied 3 months ago.

Stamp duty on the transfer from 2 to 1 names (or the other way round) is based upon the amount of money changing hands or, if no money is changing hands, half the value of the mortgage, or a combination of the two.

The amount of money which you get out of the all property including the mortgage repayment has to be under the stamp duty threshold for him to avoid paying stamp duty on buying you out

you would have to pay stamp duty on the new property at the increased rate and then recover it back when you came off the other property within 3 years.