Q As our son will go to university next year, we are considering buying a flat or property in the city where the university is for him to live in. We want to buy the property as a first-time buyer in my wife’s name as she doesn’t currently own property in her sole name. However, when my wife applied for a mortgage, the bank suggested that she take out a joint mortgage as her income is not enough for her to get one on her own. However, I have two properties under my name and one of them with a small amount of mortgage left. Does including my name with my wife in the mortgage affect her first-time buying status? Will this lead to a higher charge for a second property?
A If you were hoping that buying a property in your wife’s name would mean that she – as a first-time buyer – would be eligible for the first-time-buyer relief from stamp duty land tax (SDLT), I’m afraid that you are going to be disappointed.
First-time buyers’ SDLT relief is available in England and Northern Ireland on properties costing £500,000 or less and charges 0% on the first £300,000 but 5% on the amount between £300,000 and £500,000.
On the face of it, if your wife were buying a property in her sole name that was going to be her home, she would qualify for the SDLT relief. But she is not, so she wouldn’t. But even if your wife were buying a home for herself, the fact that you already own property means that she still wouldn’t get first-time-buyer relief, which is available on the £300,000 of the purchase price of a property costing up to £500,000 (there’s no relief if it is more than that).
Because you already own more than one property, you would be liable for the higher rates of SDLT on any future purchase whether in your name or your wife’s. This makes first-time buyer relief unavailable to your wife. If it makes you feel any better, first-time buyer relief is also not available where joint purchasers are not all first-time buyers.