Stamp Duty Question - 2 people buying & 1 1st time buyer 1 not

Hi there

Have a question about 2 people buying a house together where 1 is a 1st time buyer and 1 isn't. I have heard a lot of talk that it's getting more and more difficult to sort the legals so stamp duty is only paid on 1/2 of the house.

In essence, our plan was to get a joint mortgage, and to sort the deeds in such as way as they were only in 1 name, or there was a clear indication that the house was 50/50 to ensure stamp duty would only be paid on the 2nd time buyers share, and not the first. I fully appreciate that the details need to be discussed with a solicitor, but just wondering if anyone has some info on this.

At a high level the house is c. 400k which means that if we both had to pay stamp the stamp duty would be 19,250. Whereas if there was a way to use our first time buyers status, even for half the house the bill would be 9,625.

Anyone any ideas if this is still possible?

When I helped my ex to get her mortgage, my name was not on the deeds and there was only stamp duty payable for her, not me. So I imagine if the first time buyers name only goes on the deeds they would be V.A.T exempt. Open to correction.

well I wont be helping her out, we'll need bothincomes etc to get this sort of mortgage at the moment, so will very much be a joint effort - would that change ur thinking?

phoned a solicitor and asked them thought why not and they're saying 2 names on mortgage, 1 name on deeds is legally fine, but it's up to the discretion of the bank.

Changes things a bit - anyone any experience with this, whereby 1 application would not have been enough to get the mortage on your own, it took 2, but the bank were happy to allow this?

Again just trying to see what our options are, is a saving of 10k almost, and trying to see is this common etc

If two people are buying the house together and one is ftb and one is not, and its not a new house, then stamp duty is payable on the full market value.

Revenue have flagged this persistently. No amount of putting deeds in one name and mortgage in joint names will help. Once Revenue come knocking ( and they will - they've already done a huge trawl on "supposed" first time buyers ) stamp duty will be payable with interest and penalties. If they don't come knocking, the liability still exists - stamp duty is self assessment.

The only way to do it is (a) have ftb buy in sole name only and with mortgage in sole name only or (b) have ftb buy in sole name only and with mortgage in sole name but with second person as guarantor. Second person has no legal interest of any kind in the property. You cannot use a legal contract to deal with this.

Is this common you ask?

It was because no matter how clearly you set it out for people, they will not listen and will happily perjure themselves to "save" tax, happy in the knowledge that if someone else allowed them to do it, that they could ultimately blame that person. Banks also in their lemming like urge to lend more and more money were happy to do it. Will they do it now? I think they take the view that better not.

For a full brief on this Google Revenue First Time Buyers. It is very clear and succinct.

mf

mf - thank you for that I now understand. So the only option that seems to be there is to get a mortgage in the FTB's name, with the non FTBS as guarentor, however it is unlikely this would be enough to secure the mortgage.

Pity -seems like lots of people dont get to use their FTB status - I didnt as I bought with my brother, she wont as she'd be buying with me.

Graham, when my ex and I got the mortgage, they took both of our incomes into account, but only her name was put in the title deeds. They were fine with this, once you sign to say you are paying the mortgage, just not on the title deeds.

PaddyW said:

Graham, when my ex and I got the mortgage, they took both of our incomes into account, but only her name was put in the title deeds. They were fine with this, once you sign to say you are paying the mortgage, just not on the title deeds.

Click to expand...

PaddyW
Grahams post is about whether or not two people buying together (where one is ftb and one is not) can utilise the ftb exemption. The answer is no - not legally. You say that your ex paid stamp duty on the property, which was bought in her name. So it seems that you never intended to have any legal interest in the property.

The big issue in Grahams case is that he wants to have an interest in the property.
mf

Ok, he didn't make that clear. In that case, no, he can't do anything to exempt themselves.

What happens in a situation where a FTB buys a house on their own, only one name on mortgage, one name on deeds, but then at some point later (could be 1 month, could be 1 year, etc.) marries someone who isn't a FTB and puts their name on the deeds? Any clawback etc?

A whole new mortgage would have to be taken out I imagine and stamp duty paid by both parties?

This question comes up regularly on these forums. I was in a similar situation myself (me FTB, girlfriend not).

The Revenue Commissioners are quite clear about it - see here:

[broken link removed] - see sections 5, 6, 7 and 9.

We paid the Stamp Duty.

You would still get first time buyer status in relation to Mortgage Interest Relief by the way.

KBC Homeloans (formerly IIB) were accepting two on mortgage loan, one on title up to very recently, but I'm not sure if this has changed over the last couple of months. If you are single, you need to give them a letter saying you intend to mary within the next three years, if you are still not married after this time, they can force you both to go on the deeds.