To ask how to avoid 2nd home rate stamp duty

[Stampdutywoes]

Hear me out before you attack.

Currently living in rental property after splitting with ex partner. We own the home he is living in jointly.
The landlord of my rental wants to sell and I would like to buy it but the additional 5% stamp duty rate for what would count as a second home is a killer.
Are there any conveyancing solicitors who could advise on how to avoid (not evade) this extra 5%?

If you will own one property outright (albeit in the form of half each of two properties) you are indeed more affluent than a lot of homeowners. And most of us who have to pay stamp duty.

I own 6 houses. All mortgaged. I am less wealthy than you. And I've paid stamp duty 5 times.

This is no different, I was only asking about options for tax avoidance not tax evasion
And you've been told there is no tax avoidance scheme available in your situation from the start of this thread, so why are getting cross and insisting that it's not fair?

You will basically own, or part own, two houses. You need to pay the duty.

I’m not getting cross at all. I’m enjoying the entertainment of others getting cross about my impertinence at asking about possible tax avoidance options.

Yes, that’s been acknowledged

@Stampdutywoes ,

I think you are vastly overcomplicating this.

Surely, your ex borrows 600k (or less) on the existing property and buys you out (on the numbers you quoted). Then you have a property each and autonomy as to when to sell both of them and when you die, probate doesn’t become a nightmare for your children.

If that is too much borrowings and too much property for him, he should sell.

How will it work currently if either of you want to move or trade down?

(And it will solve your stamp duty problem).

Haven’t read the whole thread so sorry if repeating earlier messages. If you truly trust your exDP, can you transfer the entire first property into his name and have an agreement that he will pay half of the proceeds on sale as settlement? If you’re getting divorced that might be enforceable as part of the financial agreement. It would be much more difficult in the other direction, if you want to agree to give him half of your sale proceeds, because he won’t have contributed anything to that property during your time together. But possibly worth talking through with a solicitor if you think this could work for you.

p.s. It’s wild how much bad intent is assumed when someone just wants some advice. Hope you find something that works for you, OP.

So you'll both own 2 property's? then you will own 2 homes? so you will own a second home. This really isn't rocket science now is it. Do you understand second refers to the number after one?

Then it is a second home and you pay the additional stamp duty! Why would you think you can avoid this if you own a second home?

If you don't want to pay additional stamp duty one of you buys the other out and the other person buys somewhere else. I'm just facinated you thought there'd be some work around this... It is quite funny how you think that joint ownership of the property only counts as owning half a house in stamp duty terms.

If this was the case when we move soon I'm still a first time buyer as I only own half my first home we bought, so I should still get my first time buyer discount on the stamp duty on the 0.5 of the new house I am buying 😆. Yes that's how ridiculous you sound.

@GreatEscapes Yes, I would recommend getting legal advice, but I think only selling the big property would let OP release the money if ex can't get a mortgage.

HNRTT but perhaps think about what your goals are for each of you retaining an interest in both properties (transferring on death, retaining a share in property value increase or ...) then see if there is a way to achieve these goals contractually without being an owner of both properties. You'd need to work through the consequences with a solicitor but if it were to equally share the benefits of capital appreciation when the two properties are different then you might be abler to agree this contractually between the two of you without each sharing ownership of both, for example.

Who pays the mortgage on the house you own with your ex? Does he pay you any rent and how long have you been living in the rental?

Asking all these because my husband had a house in his name but lived with me in a house I purchased for about 7 years, I then sold that and we both purchased one together, but he didn’t have to pay the second home rate. Solicitor told us you only pay the second home rate if the first home is one you’re residing in and you’re buying another residential home. So you have to prove you don’t have any residential ties to the house you already own (other than owning it).

Not sure if that makes sense!

"Explain to me why it is any different financially to if we each owned one of the houses rather than each owning half of both houses, given that we live separately."

It isn't different except there is more stamp duty pay on the second house (yours) and, depending on where you live council tax may be different?

As you seem on good terms with your ex maybe you can go 50/50 on the stamp duty?

Then when/if he/you sell/separate more completely you can adjust who owes who what.

I think a bargain basement conveyancer is going to have problems with this situation. You need to get a decent experienced one.

Hey, you're the financially savvy one.

Except that’s exactly what you are planning on doing. If the house you used to live in is mortgage free, then give him your half. Why continue to be financially linked to an ex for the rest of your days?

You’re being ridiculously bullish about having to both own both of them. Value the existing property. He buys you out, with the amount he has to help with the new house in cash and the rest as a loan secured on the property. Decide if you want interest or want your remaining share to stay as a % of the house. Get a solicitor to draw up a deed of trust and make sure your interest is registered at the land registry. Then you’ll own one each, problem solved.

You forgot the satire emoji, so I have to take it at face value...

I dislike the suggestion...

as would HMRC

I assume you previously worked as Jimmy Carr's accountant 😀

I’m not getting cross at all. I’m enjoying the entertainment of others getting cross about my impertinence at asking about possible tax avoidance options
You were given great advice on the first page and told it wasn't possible. You're the one who started the 'but if I own two half, it makes a whole, so it's not fair', which is a silly argument because most properties are jointly owned and therefore most people only own half!

If you want to own two homes you cant avoid the stamp duty.

You could let exH buy you out the marital home and then I think you can get it refunded.

But if youre going to own to homes there isnt a legal way to avoid it

Thank you for that p.s
Anyone would think I was proposing to drown some puppies

So you will own 2 properties. One property is beyond many people's dreams but you'll have two. Have you considered just paying the tax like a responsible adult?

Don't ask for advice here, get it from a proper expert in this sort of property law. Otherwise you could make a very expensive mistake. Good luck!

Calm down. I will pay the tax as legally required. I was asking if there were avoidance options (as there are in other areas of tax) and several posters have confirmed my earlier research that there are not.

Are you aware of the financial challenges people face? The severe deprivation that some people live in? Avoiding tax so you can build your property portfolio whilst screwing over the tax payer and those who have no choice but to rely on us is arguably on a par with drowning puppies. I hope you don't sleep well but generally people as self-centered and greedy as you don't care enough about others to lose sleep.

True, I haven’t made an offer yet but it seems I need professional advice before doing that.