I received this email from an existing client today; we assisted her last year by adding her onto the mortgage of a rental property owned by her mother to help mitigate inheritance tax in the future.

“As you know I have been saving money towards a house for me which I want to get very soon. I was speaking to mum about this and she seems under the impression that it would be very difficult to get a mortgage for a house even with a good deposit as I am on the mortgage for the other property. I would really appreciate your advice on this.”

My reply was:-

“You will be absolutely fine to get a residential mortgage; the property is rented out and on a proper buy to let mortgage so most lenders will ignore it as long as the rent sufficiently covers the mortgage which it does.

However, what you do need to be aware of is that you will have to pay the stamp duty surcharge on your new home even though it isn’t a B2L property because you are not REPLACING a current home and presently live with your parents. It’s a real anomaly with the system but it is what it is.

To calculate what the extra cost will be use this calculator and sit down when you use it!


This is a crazy situation and one with which I am livid about on behalf of my clients. The stamp duty surcharge was aimed at landlords and second home owners but landlords who do not currently own their own home are also being caught out by it which is ridiculous!

I’ve had this questioned by a few clients as they can’t quite believe it’s true but it is and here is the legislation:


Section 3.1 – fail on condition D as you are NOT replacing your dwelling so the surcharge applies.

Read 3.6 onwards for what classes as a replacement.

Finally see chapter 8 – Question 2:-

Q2. I currently live in rented accommodation but own a property that is rented out. I am now looking to purchase my first home, for me and my family to live in. Will I have to pay the higher rates of SDLT on this purchase?

A2. Yes, the higher rates of SDLT will apply as following the purchase you will own an additional residential property (and will not have replaced your main residence, i.e. sold a current main residence and purchased a new one).

Follow the table below for your circumstances to find out if the surcharge will apply to you:-

SDLT Surcharge Chart

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