Stamp Duty Question

Eliminator

Active Member
Does anyone know if you pay Stamp Duty when you mortgage a property you already own?

I am seeking to use a mortgage product to release cash equity to help my elderly parents bridge the financial gap between purchase of a new house now and sale of their current one next year. I don't want to take on a mortgage on that new property as it will incur non-refundable second home Stamp Duty fees (as I already own my own home and a rental). Instead, I was planning to release equity from the rental house (for which I have fully paid off the mortgage) by re-mortgaging it. However, the websites etc seem a little unclear whether such an equity transfer between myself and the bank (appox. 60% LTV - £120,000) would incur Stamp Duty given I currently own the house outright. Does anyone here know one way or another?
 

imightbewrong

Distinguished Member
You pay stamp duty when you buy a property - not just by borrowing money against it.
 

Eliminator

Active Member
Does a mortgage alter the legal owner though? The way I always understood it is when you have a mortgage, the bank is the legal owner and you own a % of equity. So mortgaging a property that is wholly owned means legal owner shifts from me to the bank - and I was wondering if that triggered Stamp Duty?

I am no expert on this though, hence why I am asking, so it could be my understanding of it is entirely wrong :)
 

imightbewrong

Distinguished Member
No, the bank is not the owner - they are a party with an interest.
 

MSW

Distinguished Member
Your parents (assuming they are the ones buying the house and are the owners of the house that will be sold next year) will have to pay “second home” Stamp Duty within 14 days of buying the new home

This “should be recoverable” when they sell their current residence next year
 

Eliminator

Active Member
Thanks MSW, I saw your earlier thread but didn't want to take if off on a tangent just incase you came back to it. I am similar position to you I think in that the parents are buying now but can't sell their house until next year. Quite a hit on second home Stamp Duty but, as you say, recoverable as long as they complete the sale within 18 months (for Scotland).
 

MSW

Distinguished Member
Thanks MSW, I saw your earlier thread but didn't want to take if off on a tangent just incase you came back to it. I am similar position to you I think in that the parents are buying now but can't sell their house until next year. Quite a hit on second home Stamp Duty but, as you say, recoverable as long as they complete the sale within 18 months (for Scotland).

Yes a big hit and whilst it would be great to avoid it I’m absolutely just going to pay it.
 

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