I am currently buying my main home with my girlfriend. My parents’ house was mortgage-free when my dad died, and his share went to my mum. However, she passed his share to me by deed of variation, so that I now own 50% of that house. My mum wants to move, and I want to buy her share with a mortgage so that I can let it out. The property is valued at £400,000 and I hope to get a mortgage to buy her share for £200,000. How much stamp duty land tax (SDLT) will I have to pay? I already own 50% - surely, I won't need to pay tax on that?
Arthur Weller replies:
There was and is no SDLT on the first half of the house your mother gifted to you, because it was transferred for no consideration. I presume it is not linked to the proposed purchase of the second half: www.gov.uk/hmrc-internalmanuals/stamp-duty-land-tax-manual/sdltm30100. If you buy thissecond half before buying your main home, you will not have to pay the extra 3% SDLT, because at that point you will only own one house. SDLT on £200,000 is 2% on the difference between £200,000 and £125,000, i.e. £1,500.