Woohoo! A freeze on stamp duty, you say! Yes; Stamp Duty on certain purchases has been frozen until 31 March 2021. How exciting! Let’s buy our own castle, I hear you say, whilst doing T-Shirt aeroplanes around the living room. Hang on though….
I am not going to apologise for being the sensible voice in the giddiness of house hunting. The property you buy, the home you have, is likely to be the largest single investment that you will make and I am not wholly convinced that enough thought is given to how the house is funded and that money protected.
If you are lucky enough to have family helping you out to buy your property, think about how you can protect their money if things don’t quite work out has they should. This is particularly important if you are living as a couple and you are not married. If you are putting in your inheritance from Great Aunt Flo, what happens to that money if things don’t work out? Are you getting that back first before dividing any proceeds of sale? Or does it give you a bigger share in the proceeds of sale? Does it not matter at all and you are sharing your inheritance, effectively, with your partner?
What if you are an older couple buying a house together and you each have your own children? Have you thought about what will happen if one of you dies earlier than the other or one of you has to go into a nursing home? If you have adult children, I think it is worthwhile making sure your adult children know what you have agreed.
A Deed of Trust will sort out shares in the property and a Living Together Agreement will set out the terms of how you are going to live together, share financial obligations and separate if something has gone wrong. The fees you will pay to get this sorted out at the beginning of the journey are about ten times less than you can expect to pay if you have to get involved in court proceedings to untangle disputed ownership shares.
Another important aspect of the stamp duty freeze relates to couples that are in the process of divorcing. Suddenly, there is more money to go around for a limited window of time because the stamp duty can be left out of the calculations – but only if you get moving and take advantage of it.
If you need help in arranging an agreement or getting the financial matters sorted out as you are separating, contact me.