Q In 2016 I bought a flat and have since married. My husband does not work due to ongoing mental health issues and he does not own any property of his own.
I want to move to a house but ideally would like to keep the flat as an investment for our son when he grows up.
Would I have to pay the full second home stamp duty if I buy the new home but list myself and my husband as joint owners?
Basically the higher stamp duty rate would be quite restrictive for me on the new property and I am wondering if there is a way around it?
AP
A No, there isn’t a way for you to avoid paying the higher rate of stamp duty land tax (SDLT) – which is the standard rate plus three percentage points – on the purchase of a second home. You are mistaken if you think that, because your husband doesn’t own any other property, he would be let off paying the higher rate of SDLT if you listed him as a joint owner on the new house. It would make no difference at all. If the higher rate of SDLT is due because either (or both) the joint purchasers has other property, the higher rate applies to the whole purchase price.
You could be forgiven for thinking that if you were to make your husband the sole owner of the new house, he could use his current property-free status to avoid the higher rate. But that doesn’t work either. Unlike with other taxes, when it comes to SDLT, HM Revenue & Customs (HMRC) treats a married couple as financially intertwined. So as a couple, the joint purchase of a property – even if it is a second property for only one of you – is taken to be a second property of the couple.
The same applies to an unmarried couple jointly buying what would be a second home for just one of them. However, if the non-property-owning half of an unmarried couple were to buy a property in his or her sole name, he or she would escape the higher rate of SDLT because any other property owned by his or her partner wouldn’t be taken into account.
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