Homeowners warned ‘don’t get caught out’ by second stamp duty payment when moving in

The Property Show podcast release trailer

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Property expert Louisa Fletcher and Andrew Montlake, also known as “Monty”, returned with the third instalment of their podcast The Property Show. The weekly podcast focused on property rights for cohabiting couples, new rights for renters with pets, negative interest rates and what to consider when buying a property with your other half. The show was as informative as ever, with Monty and Louisa also sharing when couples could be liable for stamp duty further on down the line.

Louisa explained that if your partner is moving into your home with you, they could be liable for stamp duty.

She also advised homeowners to contact their mortgage lender or broker if they want to add a partner to the mortgage.

Monty said in some instances it would be a new mortgage application.

He explained: “Different lenders work in different ways to all intents and purposes it’s pretty much a new application because you’re adding a whole new person onto the mortgage.”

Louisa added: “There’s also one other little thing that can catch certain property owners and couples out.

“This is about stamp duty. You know how much I love stamp duty!”

Louisa explained that it depends how much money the person moving into the property will put into the mortgage and how much equity already exists.

She continued: “What can happen is depending on how much money the person moving into the property is putting in, and how much equity already exists in the property to start with there may well be something called a chargeable consideration that you have to pay stamp duty on.

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“So a lot of people think when you buy property – you will pay stamp duty unless you’re a first time buyer – that’s the only time you’ll pay stamp duty but that’s not true.

“There are instances where if you are transferring ownership of a property, you pay stamp duty again.”

However, Louisa explained that like the current stamp duty holiday, there is a threshold which dictates when someone may have to pay.

She added: “The threshold is £500,000 so that means the chargeable consideration if it’s half a million pounds, will pay stamp duty to add someone to the deed of that property.

“Nobody ever tells you that, do they?”

Louisa said the unexpected property tax, surprisingly, catches out a lot of homeowners.

With house prices fluctuating upwards, more couples could find themselves liable for SDLT if they’re not careful.

She continued: “If you think about house prices in London and the southeast, and how far they’ve moved over the last ten years.

“Then you think about if you were to move in with a person with a property and they’ve spent ten years paying down the mortgage and then all of a sudden you’re coming into this arrangement – it catches out more people than you would think!”

Louisa recommended double-checking the value of the property and with your solicitor if there is a chargeable consideration and if so, how much SDLT you will have to pay.

The current stamp duty holiday is due to end on March 31.

The holiday was put in place in July and means that house buyers currently don’t have to pay stamp duty land tax on properties worth under £500,000.

However, buyers have to complete their transactions by March 31 to hit the current deadline.

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