Question for all the Housing experts

[Chicken Runner61]

How does the government/mortgage companies know who is a first time buyer?

I always thought that there was a register somewhere when there was a tax implication but how will they work out who is eligble for stamp duty and who is exempt on the budget £250k thingy?

Also what happens if say you sold up 15 years ago went abroad and came back becoming a first time buyer again?

Theres lots of reasons people need to get on the housing ladder again so why can't everyone be helped with mortgages up to £250k

Also how could someone buying say a £3M property as their first property ever really be taken seriously as a first time buyer??

Could a government make life anymore complicated if they really tried?

 

[Juan Albion]

It may be simply a case of wording on the application.

I am in a similar situation to the one you describe, but not in the UK.

I owned houses in the UK before coming to Canada 15 years ago. Since then I rented or lived in houses that came with the job. But next week I am buying my first Canadian house. There is relief on stamp duty for first time house buyers here, but the wording was very specific (and disappointing in my case) as it stated you must not have owned property ANYWHERE IN THE WORLD to be eligible. What would happen if you lied, I don't know.

 

[dazzalewis1968]

i thought the same today called a lawyer buddy and there is no way of telling
truth be told!
the office i run in barnet only sells propertys 500k plus so not in my price range but the ex 1% over a mill will come in to play for me.

 

[Uncle Spielberg]

The credit search the lender does will show all credit for the last 6 years including mortgages. I would suggest no one tries to get around this as you could have a mortgage offer, exchange contracts and pay a deposit which is not refundable and legitimately have the offer withdrawn by the lender before completion if they subsequently find out you are not a first time buyer.

 

[Uncle C]

Also what happens if say you sold up 15 years ago went abroad and came back becoming a first time buyer again?

Thats like saying if you haven't had sex for 15 years you become a virgin again.

 

[beorhthelm]

i've been told lenders consider you eligable for "first time" deals after 6 mths without in a property, though i excpet it changes from bank to bank.

the little treat to first time buyers forgets they usually buy from owners who wont have this benefit. if people arent moving out of low price properties, how does this help the first timer much?

 

[Chicken Runner61]

Thats like saying if you haven't had sex for 15 years you become a virgin again.

Not quite but equally frustrating I imagine

 

[Chicken Runner61]

The credit search the lender does will show all credit for the last 6 years including mortgages. I would suggest no one tries to get around this as you could have a mortgage offer, exchange contracts and pay a deposit which is not refundable and legitimately have the offer withdrawn by the lender before completion if they subsequently find out you are not a first time buyer.

I take the point US but the six years thing is what I am getting at. 30 years ago you might buy a house as a FTB and live in that house till you died or maybe just move once after that. Nowadays you could move 6 times for various reasons and only be on rung 3 or 4 of the ladder.

And what if you get divorced, thats worse than being a FTB!

 

[Bozza]

The credit search the lender does will show all credit for the last 6 years including mortgages. I would suggest no one tries to get around this as you could have a mortgage offer, exchange contracts and pay a deposit which is not refundable and legitimately have the offer withdrawn by the lender before completion if they subsequently find out you are not a first time buyer.

Does stamp duty have anything to do with your lender at all?

I had assumed that the purchaser provides the funds to their solicitor (assuming they are using one) and they then pass it onto HMRC/Land Registry.

 

[ofco8]

I heard that if your name is already on Land Registry files you are not considered a first time buyer.

 

[Shropshire Seagull]

Some (few) people don't need a lender at all - gift/inheritance/lottery.

I always thought stamp duty was the tax to have your name recorded on the land registry (deeds) of a property - it matters not where the funds came from for the purchase.

Thus once your name has been recorded on the land registry, you can never again be a first time buyer [unlike some girl I once knew who became a born-again virgin]

 

[sparkie]

I don't think this has anything to do with your mortgage application or your lender.

It is simply whether you qualify for a tax break, and if you don't, whether you are prepared to commit tax evasion with the risks and penalties associated with that.

 

[Chicken Runner61]

But then if you sold the property surely your name is removed and you would also have to list other information such as NI number or Mr R Smith is going to cause confusion.

Didn't mortgages once have some tax element that you could get reduced a few years back. That was why they needed to know if you were a FTB and they used your NI number to record it?

 

[Bozza]

I heard that if your name is already on Land Registry files you are not considered a first time buyer.

Thus once your name has been recorded on the land registry, you can never again be a first time buyer [unlike some girl I once knew who became a born-again virgin]

Name alone is a very, very inexact science when dealing with c60m people as it is obviously far from unique in most cases. I'm pretty sure we don't provide NI or similar unique identifier so how would a 'true FTB' test be made?

 

[Farehamseagull]

To be honest, without reading into it in detail I had assumed this applied to any purchase under £250,000, i didnt realise it was open to first time buyers only. Either way its a complete waste of time until the lenders start lending again. Something that looks extremely unlikey at the moment, the budget did nothing to encourage or enforce this. I moved from selling houses to renting them about four years ago and i'm very glad I did at the moment as I cant see the sales market returning to a decent level of activity until the banks are forced to see sense. 20/25% deposits are way beyond reality for most first time buyers in most of the country

 

[Chicken Runner61]

To be honest, without reading into it in detail I had assumed this applied to any purchase under £250,000, i didnt realise it was open to first time buyers only. Either way its a complete waste of time until the lenders start lending again. Something that looks extremely unlikey at the moment, the budget did nothing to encourage or enforce this. I moved from selling houses to renting them about four years ago and i'm very glad I did at the moment as I cant see the sales market returning to a decent level of activity until the banks are forced to see sense. 20/25% deposits are way beyond reality for most first time buyers in most of the country

The banks are quite happy with the current situation so you might have to wait a while.

They make a nice sum on arrangement fees and paperwork and then get 5% lending you your own tax money which they borrow for 0.3%!!!

Nice work if you can get it

 

[Gazwag]

Anybody claiming to be a first time buyer will undoubtedly have to sign a form and each transaction will, with 100% certainty, be reviewed by HMR&C through the land regsitry database and if it is found that you are not a first time buyer you will with 100% certainty have to pay the stamp duty, interest and penalties.

It will be up the the purchaser to prove they are a first time buyer should HMRC question it

 

[Arthritic Toe]

The HMRC rule is very specific and is along the lines that you must never have owned or jointly owned a property anywhere in the world ever. You could try it on, but its not your mortgage being withdrawn that you should worry about, its going to jail for tax fraud.

 

[Uncle Spielberg]

The HMRC rule is very specific and is along the lines that you must never have owned or jointly owned a property anywhere in the world ever. You could try it on, but its not your mortgage being withdrawn that you should worry about, its going to jail for tax fraud.

Correct.

 

[Bozza]

Correct.

...which means you were wrong! (ie the issue has nothing to do with your lender but everything to do with HMRC)