With the introduction of higher rate stamp duty (an extra 3% on the purchase price) applying to anyone who owns 2 properties at the end of the day when the transaction takes place, you may be wondering what happens with joint purchasers and higher rate stamp duty.
There are two categories here – married couples and civil partnerships, and people who may have no relationship but are buying a property jointly (e.g. friends, siblings etc). These two different categories are possibly going to be treated in different ways with regards to the extra stamp duty that applies from April 2016.
Married couples and civil partnerships are to be treated as one entity so that pretty much (unless there is some kind of formal separation agreement in place), if they own 2 properties whether it is in both names or one is in joint names, and they are not replacing their main residence, then the extra stamp duty will be charged on the purchase.
However, it seems that the government is pretty much open to suggestions for those people who are just buying a property together and where one of the purchasers does not own any other property. They are asking for feedback in the best way to treat these kind of purchasers. Although they may end up treating them the same as married couples, if there is sufficient response to the consultation to implement some other policy then this seems that it might be possible.
It may seem unfair to some people where one already owns a property and the other does not, that the person who is effectively buying their first home may be subject to the additional stamp duty. In any case, if you are entering into this kind of arrangement you will need to check the situation once the rules have been put in place to see if the extra tax applies in your circumstances.
The consultation ends on 1 February so responses need to get in pretty soon to have an effect on the legislation before it comes into force.