For First Time Buyers, the struggle to get onto the housing ladder is, for most, a big one. Be it struggling to save the deposit for just being accepted for a mortgage in the first place, there are a few hurdles to overcome.
Additionally, there is also the issue of Stamp Duty to consider and despite a cut in Stamp Duty to First Time Buyers on the purchase of a house up to the value of £300,000 (£500,000 in London) recently being announced, there are rules still to be adhered to.
These rules are more apparent if you’re looking at getting assistance with getting on the housing ladder as a First-Time Buyer, especially if parents are involved or one person in the couple has already owned property. As help from parents or one of the couple having owned property means the exemption rules may not apply.
Last week however, Telegraph Money published details of a loophole in the system which would allow those whose parents were assisting them with a first property purchase or those where one partner had already owned property to possibly still be eligible.
Currently, anyone who is a First-Time Buyer can face a Stamp Duty bill on a home over the value £300,000 threshold (£500,000 in London). However, if they are purchasing a home under £300,000 a First-Time Buyer won’t have to pay Stamp Duty at all. There is an exception however, and those who have their parents named on the mortgage, or those who have owned a property previously, won’t qualify for the exemption.
There loophole found by the Telegraph however explains that many of those who choose to name their parents on the mortgage in order to obtain mortgages that otherwise their salary wouldn’t allow, can get around the Stamp Duty exemption.
If the mortgage taken out on the property is a ‘joint mortgage sole proprietor’ mortgage, then it means that only one name would be on the title deed therefore ensuring that they would then qualify for the Stamp Duty relief as a First-Time Buyer.
Many parents don’t want to be listed on the title deed for Capital Gains Tax reasons and so are happy to let their children be named on the deed alone.
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