second mortgage name not on first mortgage implications??

[beolight]

hi

just trying to find out the tax and financial implications of buying a second property

when we bought first home my wife got mortgage in her own name as i was self employed and my declared income was too low we didnt bother putting me on application as we thought a couple of years down the line i could buy an investment property as a first time buyer, we werent married at the time

now we find ourselfs looking to buy a bigger house and hopefully retain our existing house as an investment

existing mortgage provider put forward 2 options

1. get top up on existing mortgage to pay 10% deposit on auction property that we are looking at and leave that mortgage in my wifes name and get a second mortgage in both our names for the new property

2 combine both mortgages and add my name to first mortgage, the financialadvisor was unsure as to tax implications of this

any advise/suggestions on which is most tax efficient route to go most appreciated

 

[ramble]

In order to put the mortgage on the first house into joint names you will probably need to transfer the property into joint names, which isn't a bad idea in general, no tax implications there, income from the property will be assesed in the same way as your other income. If the mortgage is over 254K you will have to pay stamp duty at .1% on mortgage.

Either option will work but doing a top-up may work out cheaper, but you will have to get independant legal advice and sign a lot of consents and depending on the bank possibly guarantee the mortgage anyway.

You should talk to your solicitor before deciding but tax isn't really an issue. You won't qualify for first time buyer rate on the new house even if you buy in your own name for various reasons that I wont bore you with, I suspect in any event that the new house is over the limit for a stamp duty concession.