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Just after some advice on stamp duty...
I brought my first house a number of years ago. The property is under my name and has around 7-8k mortgage left.
Unfortunately due to some financial issues, I decided to rent out my house and temporarily move in with my parents. Fast forward a few years and with the extra income from the rent, a new job and then a promotion I am now a 40% tax payer. I have saved enough to purchase a house that my wife and I look to move into.
I am looking to buy this house with cash and not a mortgage. My original house is still on rent and we are moving out of my parents house to live in this house and so it should not be classed as a buy to let.
Would I still need to pay 2nd house stamp duty?
Is there a way if my wife brought the house (as she is a first time buyer) that she would not need to pay the 2nd house stamp duty amount?
Or as we are married, even though the 1st house is not under my wife's name that it would it still be classed as a 2nd house for her as well?
Also, with all this information, would my wife ever be classed as a first time buyer? The reason for asking is that I am now a 40% tax payer and would like to minimise the tax I pay from the rental income by transferring my property as tenants in common. For this, would I need a solicitor?
As you already own a property, you will pay SDLT + 3%.
Even though your wife is a FTB - as I understand she will not get the new Free SDLT allowance as you are not a FTB.
As I understand your wife could buy the property in her name only - would pay normal SDLT and may get the new Free SDLT allowance.
You should talk to a solicitor for the complexities of SDLT - im only talking basics, there are a lots of T&C that may or may not apply.
_________________________________________________________________________My posts are not financial advice, just a rambling guy passing time on a coffee break.The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance._________________________________________________________________________
Adam is right you should speak with a solicitor. That said you could also consider transferring the rental into your wife's sole name were she will, at worst, pay basic SDLT.
This will leave you to buy the new main residence in your sole name and as you will no longer have another property you will also pay basic SDLT.
This will mean that she will receive the income from the rental not impacting on your 40% taxable earnings.
I would add that this may create a taxable capital gain from when you bought it. If that gain is under the allowance you obviously won't pay any tax and it will mean that any gains are locked in now.
Its just one for you to think about but as has been said speak with a solicitor.
Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk