Stamp duty land tax

[phil.hughes1983]

Is there anybody on here which knows about this tax ? And how much I would be eligible to pay under the new guidelines as of April this year?

I have tried getting my head round it but unfortunately I'm still none the wiser.

Basically I part own a house with my brother so I understand buying a second property with my girlfriend will mean that I will have to pay the 3% tax.

The second place I'm looking at buying has a current mortgage of £127,000 and I'm looking at a remortgage of around £160,000

She currently lives in the house and Co owns it with her ex. So looking at buying him out rather than selling the house on the market.

And paying her ex off around £45,000

Some equity released and some cash from savings.

So basically how much tax will I be looking at paying ?

Thanks

[Scott_rider]

I do. I'm a Valuation Surveyor (thumbs) .

In simple terms, what is the monetary amount of the share of the second property that you will be responsible for (i.e. buying)...forget the mortgage or how you will be paying for it, just the amount of the second property that you are buying in £ notes? And, the total value of that property, regardless of who else owns a share of it and regardless of any mortgage?

[Zebedee]

Yours is one of the situations that is far less clear and you would be advised to discuss the situation with your solicitor, as whatever happens to your existing property and the tenure of the property you are buying a share of will come into play.
The legislation was put through far too quickly and all the consequences not thought through.

The other people why may be able to help are HMRC if you get hold of somebody in the right department, though they will not give advise only answer the question you ask so you need to work that out.

[The Sarge]

Phil, basically you are fooked !

So kiss the girlfriend goodbye, shake hands with Gav, and buy the bike of your dreams ( and a road bike) it will be a lot cheaper mate !

All the very best,

Sarge

[johnnyboxer]

Stamp Duty is just based on the value of the house, at sale ............nothing more and nothing less

It's not related to how you are paying for it

It is banded on thresholds according to the house or land value

Here's a calculator

https://www.tax.service.gov.uk/calculat ... ax/#/intro

Property or lease premium or transfer value
SDLT rate
Up to £125,000 Zero
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

Example
If you buy a house for £275,000, the SDLT you owe is calculated as follows:

0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the final £25,000 = £1,250
Total SDLT = £3,750


It used to be simple, now it isn't as such

I could buy 2 houses tomorrow and I would have to pay SDLT on both, dependent on their value, whether I paid cash or took a mortgage

[Dave DRZ]

Google came up with this simple advice from HMRC https://www.gov.uk/guidance/sdlt-transf ... r-property

If you are buying into 50% of the house then that 50% might be liable to stamp duty if your share is more than £125k (is the house worth more than £250k?). If it is less than £125k then you will still need to notify HMRC that you are taking part ownership. If it is more than £125k then JohnnyBoxer gave the rates that you will pay.

You mention a second house owned with your brother. This might complicate things when you come to sell one of the houses, because you might have to pay capital gains tax on any profit you have made on the sale (this is in addition to any other fees like estate agents, stamp duty, conveyancing etc... associated with buying and selling property) because you can only be registered by HMRC as living in one house, you need to give some thought as to where you might be liable for most profit (and tax) and register that as your home to avoid cgt.

One other thing to consider, as you aren't married, you might want to draw up something like a deed of covenant that explains how the ownership of the house is split - any solicitor can do this - for example when my partner and I bought our house 15 years ago she put more deposit down, I wanted the split to be 45/55, when we bought a second house a few years ago with money I inherited it was a different split (I forget the figures). It saves any awkward conversations later on if the relationship goes sour.

Dave

[Timcat]

If you can demonstrate that the house you are now buying is your permanent residence and the house you part-own with your brother is rented out then you may be able to side-step the SDLT uplift. It will need a bit of advice from your solicitor though but the ability to do so is within the new laws.

You also have a certain amount of time to sell your share in your brother's house before the SDLT uplift kicks in, so again if you have plans to do so speak to your solicitor about it prior to completing on the purchase of the new place.

[Scott_rider]

...and on a second property purchase there is the new uplift of an 3% extra stamp duty, on top of all the usual stamp duty rates in each price bracket.

A purchase of a property as a main residence at £300,000 will cost you £5000 in Stamp Duty.
A purchase of a second property at £300,000 will cost you £14,000 in Stamp Duty.

The rules changed in April 2016. There are ways to mitigate it.