Do You Have To Pay Stamp Duty When Buying Out Your Partner?

Yes and no. It all depends on your marital circumstances.

If you are married or in a civil partnership.

If you’re married and are divorcing, or in a civil partnership that you wish to dissolve and one partner wishes to buy the other one out, then usually you will not have to pay stamp duty.

This is because if a property is sold or transferred to one or the other partner as part of an agreement or court order incorporated as part of a divorce or dissolution proceedings, then stamp duty is not payable.

This means that as long as buying out your partner as part of your divorce or dissolution proceedings, it shouldn’t cost you a penny in stamp duty.

What if you are not married to your partner?

Now, here we have some bad news.

If you are an unmarried couple who own a home together and decide to separate, you will have to pay stamp duty if one partner wants to buy the other out.

But if the buyout is under the £125,000 threshold at which stamp duty becomes payable, then there will be no costs incurred as far as stamp duty is concerned.

But for some reason, if you get married or enter into a civil partnership and you want to transfer a share of your property to your husband, wife, or civil partner, then stamp duty may be payable.

In this instance, sales tax is payable if the ‘consideration given’, which is the amount of cash paid, the amount of the mortgage taken, or a combination of both, exceeds the £125,000 threshold.

Now you know how it all works and whether you may be liable to stamp duty, use our calculator below to work out how much this may cost:

Other things to consider

Before you decide to ‘buy out’ your partner, you must consider several factors.

Not least, you need to know whether you can afford the repayments if you need a mortgage and have a good enough credit score to take over an existing mortgage.

The other is whether you are still on a fixed-rate deal, which may incur early repayment fees if you renegotiate the mortgage.