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I wish to purchase a house with my sweetheart– should I sell my flat?

Q In 2019 I purchased a flat in my sole name. My sweetheart– who is a first-time buyer – and I wish to purchase a home together in the near future. Is it best that we won’t be able to qualify for the absolutely no stamp task rate? Would he be able to utilize any of the bonus offer he has made on his help to buy Isa?

Preferably I wish to keep my flat and rent it out but what is the best alternative cost-wise: sell my flat, or keep it when it pertains to buying your house together?

AR

A Just how much stamp responsibility you will require to pay will depend upon when you can complete a purchase and whether you do keep your flat.

If you do not keep your flat, and in the unlikely event that you handle to buy someplace prior to 30 June 2021– which is the new due date for the ₤ 500,000 stamp responsibility land tax (SDLT) vacation in England and Northern Ireland, you will pay nothing if the property costs up to that value.

Between 30 June 2021 and 30 September 2021 there will be zero SDLT on the first ₤ 250,000 of the purchase rate and after that after the end of September, the first ₤ 125,000. Again, the ₤ 250,000 limit uses just in England and Northern Ireland.

You don’t have to be novice buyers to take advantage of those guidelines.

But from July first-time buyers will be able to declare relief on the first ₤ 300,000 of a home costing up to ₤ 500,000. This relief does not apply to joint purchases unless all or both the joint purchasers are newbie buyers. So you and your sweetheart would not have the ability to take advantage of it.

If you do keep your flat and buy another residential or commercial property with your boyfriend, you’ll need to pay the 3% SDLT surcharge on the purchase price of the new property. Your boyfriend can, however, use the federal government bonus offer from his help-to-buy Isa (no longer readily available) to put towards the deposit on your joint house offered it doesn’t cost more than ₤ 250,000 outside London however ₤ 450,000 inside the capital.

Whether keeping your flat as a buy-to-let is an alternative depends on whether a mortgage lending institution thinks you can pay for to run 2 loans. You will certainly have the ability to afford to invest more on a joint property if you offer up.

This post was changed on 8 March 2021 to add details about additional properties bring in a 3% surcharge on top of normal stamp task rates.

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