On the deeds of parents home, about to buy first property, do I have to pay additional property stamp duty tax?

[qwerty2025]

Hey All,

I am currently on the deeds for my family home. (My mum still lives in the property. I do not. I was added when my dad passed away 10 years ago. I have a 25% share, my brother has 25% and my mum has 50%).

My husband and I are about to purchase our first property. We have been informed we are not first time buyers because I technically 'own a property'. Very frustrating!! I am trying to find out, will this new property we are trying to purchase currently, be considered a 2nd property for me? Which means we would not only miss out on first time buyers stamp duty tax relief, but also have to pay even more as it's considered an additional property?

Many thanks,
Bethan

Yes. If DH was to buy the house separately inn order to get first time buyer benefits and avoid second home penalties this would be fraud.

It was never a tax loophole. It wouldn’t be deprivation of assets either in the OPs case, as it’s her (deceased) fathers asset that she now owns a part of.

My son who inherited half of my late parents estate / house was also a FTB when he bought last year

as the house was sold by me the executor and my son got the cash / not the house itself so he was still a first time buyer

1. You are allowed to give property or other assets to your offspring. It’s not deprivation of assets if you give it at a time when there is no indication that you need care, and / or you haven’t done it for the sole purpose of avoiding care fees . However there are complicated tax rules if the parent continues living in the house without paying market rent.
2. We don’t know why or how this happened. It may be that the OP’s father left his half of the house directly to his Dc. So not deprivation of assets because he is deceased , not needing a care home.

It's not deliberate deprivation of assets if the OP was left her share by her father in his will. That rule only applies to gifts made in lifetime. You can't deprive yourself of assets by dying. If OP's mother varied her late husband's will to redirect the half share in the property to her children then that could be considered deliberate deprivation of assets should she ever require local authority funding for care.
I imagine the will was written this way to avoid the half share of the property being used for care home costs. It's perfectly legitimate planning in that regard .

However there are downsides as the OP has found. She will also be liable to capital gains tax on the ultimate sale of the property as it is not her main residence and she ought to make plans for what happens to her half share on her death if she were to predecease her mother. Would her mother be happy for her home to be co-owned with her son-in-law who could then remarry and leave it to his new wife etc etc ? I have seen this happen in practice.

Always consider the 4 Ds:
Death - OP / brother predeceasing
Divorce - as discussed above
Debt - bankruptcy would make the property vulnerable to creditors
Dementia - if OP or her mother loses capacity and the property needs to be sold. Again I have seen this happen. Daughter was in a car accident and lost capacity and house needed to be sold after mum died. I think the family had to get a court order in the end.

You need to plan for what happens to the property in each of those scenarios

You can be on the deeds as a trustee of the will if there is a trust for say the deceased spouse /
it prevents the other person from selling without the executor/ trustee permission
but they trustee isn’t the beneficial owner and had no beneficial interest in the property

That would certainly be absolutely fine, but I presume as in the OPs case her father left his share of the house to his children but with a lifetime interest for his wife to remain in the house it wasn’t possible. So she is stuck with paying the additional stamp duty and, potentially, CGT at some point as well.

you're not a first time buyer as you already own another property. That must have been obvious when you went on the deeds?

My mum left her half of her estate to my son with a lifetime interest for my dad in the house
I was put on the deeds as the trustee of my mums half

when my dad passed away I sold the house and my son got his money

i think it’s the way the will was worded so my son got my mums residual estate which was basically half the house as to why he was a FTB

A solicitor advised me to put our house into a tenants in common ownership and each leave our half to our children in our mirror wills. This was to protect half of the value from being taken to pay for care if the survivor needed it. I assume this is what has happened here and believe that is a legal work round.
It does mean the OP will not only not qualify for first time buyer stamp duty or help to buy ISAs but will also have to pay additional stamp duty on her home as a second home.

my parents did the same
but you do need to have someone to protect the half that’s left to the beneficiaries of the deceased persons will ( normally the executors / trustee of the will ) is put on the deeds or sometime its the beneficiaries depends on what’s written in the will

this means they can be the legal owner but not the beneficial owner ( providing they aren’t a beneficiary in the will)

I was pretty clued up about this so made sure my son wasn’t going to go on the deeds as he was planning on buying a house

I wonder if the OP was the trustee / executor of the parent who passed away and that’s why they are on the deeds
the solicitors may have done it if they were asked to update the land registry by the father

I believe that unfortunately you do have to pay.

I’m not sure why everyone is asking why op is on the deeds. It’s very clear - her father died and his half of the house went half to op and half to her brother. So they have their names on it. OP has a 25% share of that house. Her father wanted her to inherit half of his half of the house. Completely understandable.

that’s labour for you op. They’ll badge up anyone they can as a rich bastard who needs to fund society. And that’s you unfortunately now. They are also reducing the amount a first time buyer can get first time buyer relief on at the end of March. It’s all blobby taxation by stealth, pretending that they didn’t touch the working person.

What's with the snarky last sentence? Why oh why do people do this? What's eating you up so much that you are compelled to add a dig