This is the question we are often asked by clients, and we want to tackle this question by setting out a scenario below.
Say you purchased a house in June 2020 before you met your partner, Anna (hypothetical name). When you met Anna, she was looking to purchase a house and managed to complete in late November 2020. Anna lived in the property for about 8 months and then moved in with you in early July 2021. From this date, Anna rented out her house and obtained permission from her lender to let the property.
Anna changed her address and moved all her belongings in with you and since July 2021, she has contributed to the mortgage and bills for the house every month. She is registered to vote at this address, her car insurance is registered to this address, and she is registered with the local doctor’s surgery. Even though Anna’s name has never been on the title deeds or mortgage, you have treated the house as though it was both of your main residences. The house that Anna rents out contains none of her personal possessions and she plans to continue renting this house out long term.
You have now decided to sell your house and would like to purchase a home together. Anna continues to rent out her property but does not plan to live there.
What is the SDLT position in this scenario?
Will you be required to pay the higher rate of stamp duty when you purchase the house together, or will the situation qualify as replacing one main residence?
Yes, you will be required to pay the higher rate of SDLT on the property purchased together. An example is provided here in the HMRC online stamp duty tax (SDLT) manual.
What if you were married or in a civil partnership?
It would be an entirely different outcome if a married couple both owned properties but lived together in one of the properties as their main residence. The higher rates of SDLT would not apply – it would be treated as replacing their main residence.
This is not legal advice; it is intended to provide information of general interest about current legal issues.