Most Landlords and second home owners are aware that in his 2015 Autumn statement the chancellor announced an increase in stamp duty levels for anyone buying additional property including second homes. From April 2016 homeowners purchasing a second home will pay considerably more stamp duty.
Second homes will attract an additional surcharge even if they are not let out. With a much lower starting threshold of £40,000, most second home purchases now attract an additional 3% stamp duty tax.
Most Landlords would appreciate that joint ownership (with your spouse or partner) of your BTL property will help share the tax bill generated by their BTL rental income, especially when one of them is on a lower tax rate.
How many Landlords are aware that a re-mortgage of a BTL property and adding your spouse or partner to the deeds may result in an Additional Home Rate of Stamp Duty of 3% of the half share the spouse or partner is deemed to have taken on.
For example if a couple wish to re-mortgage their BTL property say with a mortgage debt of £100,000 from one name to joint names. The additional partner will be subject to the additional STLT rate of 3% which on their half of £100,000 would be £1500.
I say may result in an Additional Home Rate of Stamp Duty of 3% of the half share the spouse or partner is deemed to have taken on – in the case of an unencumbered re-mortgage (capital raising without any initial mortgage debt) there is no mortgage debt being shared so there is no additional STLT to pay.