If we buy an apartment for our son in my wife's name, will she be considered a first-time buyer?
Q As our son is going to college next year, we are planning to buy an apartment or property in the city where college is for him. We want to buy the property as the first buyer in my wife's name as she does not currently own a property in her single name. However, when my wife applied for a mortgage, the bank suggested that she take out a joint mortgage as her income is not enough for her to get one on her own. However, I have two properties in my name and one of them with a small amount of mortgage. Does including my name with my wife in the mortgage affect her status as a first-time buyer? Will this lead to a higher charge for a second property? ZZ
A If you were hoping that buying a property in your wife's name would mean that she - as a first-time buyer - would be eligible for the first-time buyer duty exemption of land stamp (SDLT), I'm afraid you will be disappointed.
SDLT exemption for first time buyers is available in England and Northern Ireland for properties costing £500,000 or less and charges 0% on the first £300,000 but 5% on the amount between £300,000 and £500,000.
On the face of it, if your wife purchased a property in her sole name which would become her home, she would have entitled to SDLT relief. But she's not, so she wouldn't. But even if your wife were to buy a house for herself, the fact that you already own a property means she still wouldn't get first-time buyer relief, which is available on the £300,000 purchase price of a property costing up to £500,000 (there is no relief if it's more than that).
Because you already own more than one property, you would be liable for higher SDLT rates on any future purchases, whether in your name or your wife's. This makes help with buying a first home unavailable to your wife. If it reassures you, relief for first-time buyers is also not available when the co-buyers are not all first-time buyers.
Q As our son is going to college next year, we are planning to buy an apartment or property in the city where college is for him. We want to buy the property as the first buyer in my wife's name as she does not currently own a property in her single name. However, when my wife applied for a mortgage, the bank suggested that she take out a joint mortgage as her income is not enough for her to get one on her own. However, I have two properties in my name and one of them with a small amount of mortgage. Does including my name with my wife in the mortgage affect her status as a first-time buyer? Will this lead to a higher charge for a second property? ZZ
A If you were hoping that buying a property in your wife's name would mean that she - as a first-time buyer - would be eligible for the first-time buyer duty exemption of land stamp (SDLT), I'm afraid you will be disappointed.
SDLT exemption for first time buyers is available in England and Northern Ireland for properties costing £500,000 or less and charges 0% on the first £300,000 but 5% on the amount between £300,000 and £500,000.
On the face of it, if your wife purchased a property in her sole name which would become her home, she would have entitled to SDLT relief. But she's not, so she wouldn't. But even if your wife were to buy a house for herself, the fact that you already own a property means she still wouldn't get first-time buyer relief, which is available on the £300,000 purchase price of a property costing up to £500,000 (there is no relief if it's more than that).
Because you already own more than one property, you would be liable for higher SDLT rates on any future purchases, whether in your name or your wife's. This makes help with buying a first home unavailable to your wife. If it reassures you, relief for first-time buyers is also not available when the co-buyers are not all first-time buyers.
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