This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Stamp Duty for 1st Time buyers

PenfoldPen
Posts:2
Joined:Thu Jun 30, 2022 11:10 pm
Stamp Duty for 1st Time buyers

Postby PenfoldPen » Thu Jun 30, 2022 11:22 pm

Hello.

Just need some clarification please.

If I sell a property to my two children (at, say, £350,000), I understand that as they are both first-time buyers they are eligible for Stamp Duty relief on the first £300,000. I'm not sure about two things.

Firstly, is the relief applicable to both or the house - i.e are they liable for the £300,000 > £350,000 part SDLT or, as they're buying 50% are they really buying at £175,000 each with therefore no liability. I do appreciate it's not a massive bill if they have to pay as it's only 5% on £50,000.

Secondly, how long would they need to have that property as their main registered residence before being allowed to rent it out without falling foul of the relief clause and the Govt clawing it back.

The mortgage is with a private lender happy to lend to either them as homeowners or BTL'ers so no issues on that side.

Thanks for any advice.

bd6759
Posts:3784
Joined:Sat Feb 01, 2014 3:26 pm

Re: Stamp Duty for 1st Time buyers

Postby bd6759 » Fri Jul 01, 2022 11:17 pm

The tax is based on the consideration paid for the property in the land transaction.

From what you say, first time buyers relief will not be due because they don’t intend to live in the property as their residence: they intend to rent it out.

What is it you are trying to achieve?

PenfoldPen
Posts:2
Joined:Thu Jun 30, 2022 11:10 pm

Re: Stamp Duty for 1st Time buyers

Postby PenfoldPen » Sun Jul 03, 2022 10:42 pm

Thanks for the reply.

I'm just trying to achieve the kids getting on to the property ladder with them buying on of our BTL's.

I really just wanted to know how long they needed it to be their main residence before they could legitimately rent it out while they go off to Uni. So, if they buy it and live it in for a year then decide to rent it out, does that satisfy the Ist time buyer relief for example.

bd6759
Posts:3784
Joined:Sat Feb 01, 2014 3:26 pm

Re: Stamp Duty for 1st Time buyers

Postby bd6759 » Sun Jul 03, 2022 11:23 pm

It has to be their residence. Residence means they intend to live there for the foreseeable future. Would it not make more sense for them to buy a property near their chosen university?

Are your children old enough to hold an interest in land?


Return to “Property Taxation”