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Can you avoid stamp duty land tax surcharge on a buy-to-let if you’re a married couple?

1-minute read

Mollie Millman

23 June 2017

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Most landlords will be aware that you have to pay a 3 per cent stamp duty surcharge on buy-to-let properties – but what if your spouse already owns a property? Should you have to pay that surcharge if you want to buy a second property in your name?

According to the government, the answer to that question is yes.

Couples count as a single person for stamp duty

The rules of the 3 per cent stamp duty surcharge due on second homes or investment properties state that ‘you may be viewed as the owner of a property if it’s owned by your spouse or civil partner.”

This means that even if the home that a couple lives in is only in one person’s name, the other partner will still have to pay the additional 3 per cent stamp duty that’s due on any investment properties.

However, there is one way to avoid this additional tax bill - and that’s if you’re divorced, although this is a rather extreme measure to take to lower your tax bill.

But are treated individual for other tax purposes

It has been years since the Government changed the law to treat wives as a separate person for income tax purposes, instead of as extensions of their husbands.

And yet, the Government is not applying the same approach to stamp duty paid on the purchase of property.

What about non-married couples with a joint mortgage?

One way to avoid the stamp duty surcharge for non-married couples is via a process called ‘sole proprietor, joint borrower’.

This is where the property is purchased and owned by just one person, but the mortgage can be in joint names.

It is a process sometimes used where a lender’s minimum income requirement of £25,000 cannot be met. By taking into account both salaries, a lender’s affordability rules can be adhered to while the property is actually only owned by one person. At the same, the 3 per cent surcharge can be avoided.

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