The Bank of Mum and Dad gone pear shaped with new SDLTMake Text Bigger
Will the new Stamp Duty regs lead to another series of unforeseen consequences for FTBs?
Those parents who have chosen to assist their children into the property market may well have found it necessary to purchase jointly or in common with their kids. When mum & dad choose to move they will presumably find themselves having to pay the additional 3% on their own new home. They may have thought twice about offering to help if they’d known this was on the horizon.
At the other end of the spectrum, those mums and/or dads who find themselves beneficiaries to all or part of their own parent’s home (which may well still be lived in by one of the parents on the death of the other), then equally mum & dad will pay the additional tax if they wish to move.
Once this becomes clear, presumably fewer and fewer mums & dads will be keen to assist in a FTB purchase with their children, thus reducing even further the FTB purchases that our beloved leaders purport to be supporting with this and Clause 24.
It also begs another question. If one parent only is party to the children’s property (perhaps by virtue of the mortgage/income requirement) then when mum & dad want to move, and assuming that their new home is purchased jointly or in common, then will the additional duty be chargeable only at 50%, because only one party to the purchase owns another property?
As a 50 something with two adult kids, and having been left 50% of my parent’s home after my father’s death, these matters give me pause. Even if we sold our investment properties, we’d be left in the position of having to think twice about moving. We can’t ask the kids or my mum to buy us/me out and the ramifications will apply not only to helping FTBs but even to making arrangements for care provision etc for older relatives. Indeed I assume that if my own mother wanted to move then I would effectively have to gift to her my share of the proceeds of the sale rather than buy jointly with her in order to avoid her purchase attracting the additional duty. So not only FTB, but potentially ‘last time buyers’ could be affected.
Or have I missed something and all of this has been fully thought through and catered for?
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