Q I purchased a house prior to meeting my husband. We now reside in the same house, but the mortgage is under my name alone. I am close to paying off the mortgage. Our plan is to move to a larger property and retain my current house to rent it out. We hope that my husband can purchase the new house solely in his name to avoid paying second home stamp duty. Is this plan feasible, or will we still be required to pay it since we are financially intertwined due to our marriage?
A I’m afraid your clever scheme to evade paying second home stamp duty land tax (SDLT) might not work. According to Tax Insider, when only one spouse buys a dwelling, it is assumed for SDLT purposes that the other spouse is also a joint purchaser, even if that is not the reality. If either or both spouses fulfill the conditions for the 3% charge to apply (by owning two properties), it is levied on the entire transaction.
So, in this scenario, you are indeed considered financially intertwined. However, there is a silver lining if you plan to sell your current home within 36 months of buying the new one. You can claim a rebate of the 3% charge because you are essentially replacing one main residence with another, which does not attract the higher rate of SDLT (hence the refund availability).
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