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.
The reason for this is that if a property is being sold or transferred to one or the other partner as part of agreement or court order, which is 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 wants to buy the other partner out.
But if the buyout is under the £250,000 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 there may be a stamp duty payable.
In this instance, sales tax is payable if the ‘consideration given’, which is how much cash is paid or the amount of the mortgage taken, or a combination of both, exceeds the £250,000 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:
Stamp Duty Calculator
This calculator can tell you how much Stamp Duty Land Tax you will need to pay on your property purchase, whether you're a first-time buyer, a home-mover or in the market for an investment property.
Your stamp duty to pay is:
Your effective tax rate is
Now that you've worked out how much stamp duty is payable, it's a good idea to talk to a broker about your mortgage options. Their knowledge and expertise can help you make sure you aren't paying over the odds with all costs and fees factored in.
Other things to consider.
There are a number of factors to take into account before you decide to ‘buy out’ your partner.
Not least is whether you are able to afford the repayments if you need a mortgage and, if you 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.