Have a got this right - Owning separate property

[TwoTwoOne]

DH and I are about to buy our first home. Our mortgage offer is from months ago when he had a CCJ. It’s since come off.

We’ve decided to still buy the property in my name only and then in time, save and buy another property in his name and rent it out.

Is this a good idea? Or are there tax implication, etc, that we should consider?

As a married couple I believe you would both be counted as already owning a property when you buy the second one so second home stamp duty will be due on purchase of the second property.

Or should it be ‘ owning property separately’

If your mortgage offer is from months ago is it still valid? You may find you have to apply again and get a different interest rate now.

Shouldn't be tax implications if it is totally in his name and your house is just in your name. But he will need a bigger deposit for a buy to let.

We’ve had the quote confirmed.

Would it be better to do it this way? Or to own both together?

Aaah right I see. I didn’t know this. We’ll look at the second being something like a 2 bed under the stamp duty threshold.

Here are the rates for additional stamp duty.

The other thing I'm wondering about is I believe property held together as a joint tenancy automatically passes to the other person on death and doesn't form part of the estate for inheritance.

I'm not sure if this would matter for a married couple if your wills were all in order but without a will a spouse only inherits I think it is the first 270k and then amounts after that are shared with children.

So basically if you hold your property in sole names keep on top of your wills.

Of course if you don't want each other to inherit your property like in a second family owning them separately or as tenants in common would make sense (and wills!)

Thank you @Winter2020 for those pointers, very helpful :)

You need proper legal advice. There are tax implications to buying a second property including stamp duty, income tax on rental income, capital gains tax if you later sell the second property, and inheritance tax dependant on how you own both properties and your estate planning.

Those various tax implications need to be considered in conjunction with your respective income and capital assets plus future plans for children, work, etc.

You'd do better to spend a few hundred quid getting some advice from a Private Client solicitor than asking here.

I'm a solicitor and I'd be getting specialist advice before doing this!

Things may have changed, but it certainly used to be the case that if you bought a second home, you had to pay stamp duty even if it cost under the normal threshold for paying stamp duty.

I tried to do this about 10 years ago but granted things might have changed. I wanted to move into my partners house and buy a second property in my name. We got specialist advice and decided it wasn't worth it, but it wasn't straightforward either in terms of the mortgage or the tax position.

Thanks all. Certainly a lot to think about. I’ll discuss this more with DH.

There will be CGT to pay onthe sale of a 2nd home. The Govt have reduced the personal allowance from £12.50 to £5000 from April '23 with a reduction to £3000 from April '24. You need tax advice.
Renting out property is not something to take on lightly. It is a serious business and you need to make sure you are fully informed about the rights and responsibilities of both LLs and Tenants

£12500 to £5000

Capital gains tax allowance from £12,300 to £6000 and then £3000
This is too late for OP but if you are not yet married and are thinking of buying separately, buy before you get married. For stamp duty purposes a married couple both own the property even if only one name is the registered owner.