First Time Buyer Stamp Duty Land Tax

Posted on 21 June 2010 by Niki


My fiancé and I are planning to buy a house together. He currently owns a flat, but I am a first time buyer. If we buy the house in my name, could I then, at some point, sign half of it over to my fiancé's name, or would we then have to pay the stamp duty?

Niki

The following passage is taken from www.direct.gov.uk:

"First-time buyers

If you are a first-time buyer the threshold for when you start to pay SDLT is £250,000. This is only if you have never owned a house or flat in the UK or anywhere else in the world. If you are buying with someone else they must never have owned property before either. This higher threshold applies to purchases made on or after 25 March 2010 and before 25 March 2012
".

If you buy the house in your sole name you will qualify for the increased threshold and not have to pay Stamp Duty Land Tax (SDLT) unless the purchase price is over £250,000.  If you buy the property in joint names this threshold falls to £125,000 and you will have to pay SDLT on the whole purchase price above this figure. 

It is possible to sign over half of the property in the future, subject to your mortgage Lender's consent and depending on the value of the property and the share handed over it is very possible that SDLT will be payable.

I recommend that you ask your Solicitor to calculate how much SDLT would be payable now if you were to buy in joint names and how much would be payable if you were to transfer a share at a later date.  You should also discuss the difference between buying as Joint Tenants and Tenants in Common.

Peter

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