Do unmarried joint buyers pay higher-rate SDLT if only one is selling their home?

Introduction

This question commonly arises where an unmarried couple buy a home together, one partner is selling the home they live in, and the other already owns a share in another dwelling. The key issue is whether the purchase counts as a replacement of a main residence for both buyers, or only for the person who actually owns and sells the existing home.

For Stamp Duty Land Tax (SDLT) higher-rate purposes, HMRC looks at each buyer separately unless special rules apply for spouses and civil partners living together. That distinction often determines whether the 5 percentage-point surcharge applies to the whole purchase.

The Question

An unmarried couple live together in a home owned by one of them. That owner is now selling the home. The other partner lives there as well and is connected to the address for everyday purposes, but does not own it. That second partner also owns a share in another flat with a family member, and that flat is not being sold.

They now want to buy a new home together. The question is whether the home being sold can count as both buyers’ main residence for SDLT replacement purposes, so that only the ordinary residential rates apply, or whether the higher rates apply because one buyer still owns another dwelling.

Nick’s Explanation

Nick’s reasoning can be summarised in four main points.

First, HMRC tests a joint purchase by looking at each buyer individually. If the transaction is a higher-rates transaction for even one buyer, the higher rates apply to the whole purchase.

Second, the seller of the current home is replacing their own only or main residence. If that person sells the home they own and live in, and after completion does not retain another dwelling interest that triggers the rules, they do not themselves cause the surcharge.

Third, the other partner’s position is different. That partner already owns a major interest in another dwelling worth more than £40,000. To avoid the surcharge, that partner would need to be replacing their only or main residence in the legal sense used by the SDLT legislation. As Nick explained, occupation alone is not enough. The buyer must generally be disposing of a dwelling that they owned and used as their main home, unless the spouse or civil partner rules apply.

Fourth, because the non-owning partner never owned the home now being sold, they are not disposing of a previous main residence. On that basis, the replacement test fails for that buyer, and the higher rates apply to the entire joint purchase.

Nick also noted that the answer would usually be different if the couple were married or in a civil partnership and living together, because the legislation treats spouses and civil partners as a single unit for these purposes.

The Law

The higher rates of SDLT on additional dwellings are set out in Schedule 4ZA to the Finance Act 2003. Broadly, the surcharge applies where, at the end of the day of the transaction, a buyer owns a major interest in the purchased dwelling and also owns another major interest in another dwelling worth £40,000 or more, unless an exception applies.

The main exception relevant here is the replacement of an only or main residence. In broad terms, a buyer can avoid the higher rates if the purchase is a replacement of their only or main residence and they dispose of a previous only or main residence within the required period.

For joint purchases, the rules are strict. If any one of the joint buyers meets the conditions for the higher rates, the higher rates apply to the whole transaction.

There is also a special rule for spouses and civil partners living together. In that situation, they are generally treated as one unit for higher-rate purposes. That can allow one spouse’s disposal of a main residence to assist the other spouse in satisfying the replacement conditions. That treatment does not generally extend to unmarried couples, even if they live together and share family life at the property.

Analysis

Step one is to test the buyer who owns and is selling the current home. That person is disposing of the dwelling they own and live in as their main residence. If they are moving into the new property and are not otherwise caught by the additional dwelling rules, they are replacing their main residence. So far, there is no higher-rate problem from that buyer’s side.

Step two is to test the other buyer separately. That buyer will, at completion, own a share in the new home and still own a share in another flat. A share in another dwelling is capable of being a major interest for SDLT purposes. If that other flat is worth more than £40,000, the basic additional dwelling condition is potentially met.

Step three is to ask whether that second buyer is also replacing their only or main residence. This is where many people assume that actual occupation of the sold home is enough. It is not. For an unmarried buyer, simply living in a property owned by someone else does not usually mean they are disposing of a previous main residence for Schedule 4ZA purposes. The disposal must generally be of a dwelling that the buyer owned and occupied as their main residence.

Step four is to apply the joint buyer rule. Because the second buyer still owns another dwelling and is not treated as replacing their own main residence, the purchase is a higher-rates transaction for that buyer. Once that happens, the higher rates apply to the entire transaction, not just that buyer’s share.

Step five is to consider whether marriage or civil partnership would change the answer. Usually, yes. If the couple were spouses or civil partners living together, the legislation would generally allow the disposal by one to be treated as sufficient for the replacement analysis across the couple. In that case, the surcharge would often be avoided.

There is no later refund on these facts merely because the couple have moved home. A refund is normally available only where the higher rates were paid because a buyer had not yet sold their former main residence and then does so within the statutory period. Here, the retained flat is not the second buyer’s former main residence, so that refund route does not fit the facts described.

If readers are considering whether a property was so defective that it was not suitable for use as a dwelling, the threshold is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. That line of argument is therefore unlikely to help unless the condition issues are truly severe.

Outcome

On these facts, the higher rates of SDLT are likely to apply to the whole joint purchase.

The reason is that one buyer is successfully replacing their own main residence, but the other buyer is not. That second buyer still owns another dwelling and is not disposing of a dwelling that they owned as their main residence. Because one joint buyer is caught, the entire transaction is charged at the ordinary residential rates plus the 5 percentage-point surcharge.

Practical Steps

Anyone in this position should work through the following points carefully before exchange and completion:

• Confirm exactly who owns the property being sold and who owns the property being bought.
• Check whether either buyer owns any other dwelling interests worth £40,000 or more at completion.
• Identify whether each buyer, individually, is disposing of a dwelling they owned and occupied as their only or main residence.
• Consider whether the spouses or civil partners rule applies. If the buyers are unmarried, do not assume shared occupation is enough.
• Review whether the buyer who owns another dwelling could dispose of that interest before completion, if commercially and legally possible.
• If one person is being included on the title for mortgage reasons only, take specialist advice on whether the beneficial ownership position is being structured correctly and whether the lender consents.
• Make sure the SDLT return reflects the ownership and replacement analysis accurately on completion.

Conclusion

For unmarried joint buyers, SDLT higher-rate treatment is tested buyer by buyer. If one partner is selling a home they own but the other partner merely lives there and still owns another dwelling, the purchase will usually attract the higher rates. Shared occupation does not replace the ownership requirement, and the special spouse or civil partner rule does not normally apply to unmarried couples.

Legal References Used

• Finance Act 2003, Schedule 4ZA
• HMRC Stamp Duty Land Tax Manual, SDLTM09764
• HMRC Stamp Duty Land Tax Manual, SDLTM09800
• HMRC Stamp Duty Land Tax Manual, SDLTM09810
• Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799

This page was last updated on 22 March 2026.

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