Own house outright; want to move. Options?

[Mezger]

Sarnie,
Can you use this option to do the following, we have a property in UK, value £150k, mortgage £76k looking to buy a second (main family home) between £700 and £900k.

Question using this LTB option does it avoid the 3% additional stamp duty on the second larger home given its the main family residence?

Ideally we want to keep the first house, happy tenants, rents easily etc.

[Sarnie]

"Question using this LTB option does it avoid the 3% additional stamp duty on the second larger home given its the main family residence?"

No.

You'd be buying another property and keeping the current one = Additional Stamp Duty due.............

[CHARLESBERG]

Sorry to jump on this thread, but a couple of relevant questions (hoping Sarnie will notice )

1) Say you remortgaged your current home, how to you get a figure for the LTV? For example, if you bought a house and the original mortgage worked on a value of £100,000 but years down the line you want to remortgage and the market value would be £120,000, would this be taken into consideration? Do the lender value it for you?

2) You had a house (main residence) worth £100,000. You are toying with the idea to buy and let out a larger home (as you don't currently need anymore room), that you could move into in the future. Eg, £180,000. Both would need to be mortgaged, you could get £60,000 together. Is this possible and what mortgage/size deposit would you need for this?

Sorry again to butt in!

Thanks in advance!

[Sarnie]

CHARLESBERG said:

Sorry to jump on this thread, but a couple of relevant questions (hoping Sarnie will notice )

1) Say you remortgaged your current home, how to you get a figure for the LTV? For example, if you bought a house and the original mortgage worked on a value of £100,000 but years down the line you want to remortgage and the market value would be £120,000, would this be taken into consideration? Do the lender value it for you?

2) You had a house (main residence) worth £100,000. You are toying with the idea to buy and let out a larger home (as you don't currently need anymore room), that you could move into in the future. Eg, £180,000. Both would need to be mortgaged, you could get £60,000 together. Is this possible and what mortgage/size deposit would you need for this?

Sorry again to butt in!

Thanks in advance!

1) Yes.

2) Technically yes, but a lender would get nervous about your intentions to buy a bigger property than the one you live in (through fear of you intending to move into it). Your income would need to be sufficient to actually buy it on a Residential basis if you needed to, to alleviate the concern of this being a back door BTL (bought on a BTL basis with the intention to live in it). If you said you intended to move into it in the future, they'd decline it.

[Ozzie Osmond]

Which brings us to one of my favourite subjects,

• Buy a decent house
• Live in it
• Enjoy the growth in value free from Capital Gains Tax, free from problem tenants, free from letting agents, free from complicated income tax returns, free from hassle.

[Mezger]

Sarnie said:

"Question using this LTB option does it avoid the 3% additional stamp duty on the second larger home given its the main family residence?"

No.

You'd be buying another property and keeping the current one = Additional Stamp Duty due.............

Thanks Sarnie, so the only option to avoid the additional 3% is to sell property 1 before buying property 2.

[Sarnie]

Mezger said:

Thanks Sarnie, so the only option to avoid the additional 3% is to sell property 1 before buying property 2.

Well, you can buy property 2, incur the additional SDLT and then reclaim it back if you sell property 1 within 36 months.....

[Jockman]

Ozzie Osmond said:

Which brings us to one of my favourite subjects,

• Buy a decent house
• Live in it
• Enjoy the growth in value free from Capital Gains Tax, free from problem tenants, free from letting agents, free from complicated income tax returns, free from hassle.

Agree 100%

I only have one BTL and that's to house the in-laws. I'm about to buy another for my own folks. Other than that all revenues go on my primary residence.

[Mezger]

Sarniethsnkd said:

Well, you can buy property 2, incur the additional SDLT and then reclaim it back if you sell property 1 within 36 months.....

Thanks, very handy to know if you sell property 1 within 3 yrs it can be reclaimed

[Rangeroverover]

The only other option is the granny annexe allowance, it needs to be less than a third of the value of the main house plus a few other hurdles to qualify

They adjusted the legislation to prevent people paying 3% when buying somewhere with an annexe

[rufusgti]

Ozzie Osmond said:

Which brings us to one of my favourite subjects,

• Buy a decent house
• Live in it
• Enjoy the growth in value free from Capital Gains Tax, free from problem tenants, free from letting agents, free from complicated income tax returns, free from hassle.

Could you give us an example of how your method can provide an income?

[CS Garth]

Audemars said:

Why not remortgage your current house as a buy to let. Eg take out £120k and use this as a large deposit for your new place.

Ive never heard of let to buy so not sure how this works but Im sure in either case you will need to show you can afford to cover both mortgages at the same time for a certain period in the event of the rental property being empty for certain periods.

The general rule is to never sell a property.

I have never sold any in my life and now own 5 also being mortgage free on my main residence.

Edited by Audemars on Thursday 28th April 22:35

Bump