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Could being married or being in a civil partnership affect you being classified as a first-time buyer for Stamp Duty Land Tax purposes?

Posted on 12 March 2020 by Laura Godfrey

Could being married or being in a civil partnership affect you being classified as a first-time buyer for Stamp Duty Land Tax purposes?

If you, and anyone else you’re buying with, are first time buyers of residential property you can claim Stamp Duty Land Tax (SDLT) Relief where the purchase price is no more than £500,000.00.

You will pay:

  • 0% on the first £300,000.00
  • 5% on the remainder up to £500,000.00

If the purchase price is more than £500,000.00 you cannot claim the relief and you must pay the standard rates on the total purchase price.

When we are instructed to act for a client purchasing a residential property, there are several questions we ask in relation to SDLT. One of those questions is:

“If you are married or in a civil partnership, does your spouse or civil partner own any property (including owning a major share in another property)?”

Whether you intend to purchase a property in your sole name or jointly with you spouse/civil partner, it is important to note that if you are married or in a civil partnership this would not stop you from being classed as a first time buyer. This is only so long as you or your spouse/civil partner doesn’t already own property.

However, if you are married or in a civil partnership with someone who does already own property, you wouldn’t be able to claim first time buyer relief if they are not planning on selling their own property. This is due to the SDLT rules which treat married couples/civil partners as a single entity.

If you intend to purchase a property, even in your sole name, as a “single entity” of a married couple/civil partnership the purchase would result in you owning two properties. In fact, the purchase of the second property would be liable for higher rate SDLT.

One way to avoid this and be eligible for first-time buyer relief, would be to ensure that your spouse/civil partner’s property is sold before, or on the day, that you complete the purchase of your property.

If this isn’t possible then you would have to pay higher rate SDLT but if your spouse/civil partner’s property is sold within three years of moving into yours, you’d be able to claim back the higher-rate surcharge.

For any questions regarding SDLT, including whether you are eligible for first time buyer relief or whether you would be subject to higher rate SDLT, please feel free to contact any one of our Residential Conveyancing Teams for advice.

Posted in: Buying & Selling Your Home