Stamp Duty Changes - 2nd Property as a residence

[Carlton Banks]

All,

We are looking to purchase a property soon.



We currently rent but I already own a flat that is a buy to let (I used to live there) but moved in with the wife into a rental flat in central London.

If we buy a house, it will be my second property but it will be our primary residence. It will be my wife's only property.

With the new stamp duty rules, how will they affect us?


Thanks!

[Sarnie]

From a few threads down from yours;

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

[Eric Mc]

No one knows for sure. The details have not yet been published. There are other threads on here where all sorts of permutations have been postulated - usually without a full answer being possible.

If YOU already own another property, then no matter what purpose you have in mind for a second property, it is a second property and therefore the extra 3% stamp duty land tax will apply to YOU.

If another person is also buying the same property with you but it is not THEIR second property, then the stamp duty surcharge will NOT apply to them.

That is my take on the rules as currently set out.

If you dispose of your original property within 18 months of buying the second property AND the second property is your main residence, you will be able to reclaim the extra 3% stamp duty you paid.

No one knows yet how this type of reclaim will be made.

[Jobbo]

Eric Mc said:

If another person is also buying the same property with you but it is not THEIR second property, then the stamp duty surcharge will NOT apply to them.

Married couple and civil partners will be treated as one unit for the purpose of this, assuming the guidance from the consultation process does not change. See section 2.4: https://www.gov.uk/government/consultations/consul...

[Eric Mc]

WE shall have to wait and see. There are an awful lot of "ill thought through" aspects to this particular piece of legislation that are going to cause an awful lot of upset and anger.

[Ozzie Osmond]

My understanding is,

• Buying ANY second property will always incur the extra 3% stamp duty,
• UNLESS you are genuinely selling all other properties and intend to retain the new property on its own as your main residence.

As Eric says, the full detail has not yet been published. However, I doubt husbands and wives will be allowed to have one property each (although conceivably there might be an exception for couples where he lives/works in London and she lives/works in Edinburgh.....)

[DonkeyApple]

I'm not entirely sure it's going to hit the second home market that much in contrast to the impact it and the changes in how rental income will be taxed will effect the BTL market. 3% extra up front on a leveraged business has big impacts. 3% extra on a luxury purchase that is considerably less leveraged if much less important.

When buying a second home you are in a far stronger position than someone who is part of a chain and added to that there will be fewer BTL competitors in the market and it all adds up to being able to get the seller to swallow some of the tax.

[Casa1862]

I'm in two minds to add another BTL, thinking 1 bed flat around Milton Keynes/Luton/Dunstable for the £130k mark. Saves almost £4k stamp duty which doesn't need to be found upfront, mortgage products fees are high but the can be added to the mortgage so not as painful.

Decision is buy now, fix mortgage for 5 years, don't think they drop much from £130k or 600pm rental in five years or wait until after April when could be more on the market and better idea if any more surprises in the March budget. Any views welcome!