Stamp Duty and Main Residence

[Broomfondle]

The initial message was deleted from this topic on 14 June 2019 at 17:56

[snorky782]

Ozzie Osmond said:

crashley said:

Hold on... you have me panicked here. Even if the new purchase is your primary residence, you still get whacked for 3% additional? I ask as i will be completing late April/early May... i'm selling main home to buy another, but i own and rent out my old flat.

Yes, you are dead centre in the category to pay this additional Stamp Duty.

The ONLY way to avoid the tax would be for you to sell BOTH your existing properties and by one new house.

You don't have to sell them before you buy the new home but they must be sold within 18 months. If the sales are after the purchase you will need to pay the +3% up front and then have the right to reclaim it later after the sales.

I thought if it was replacing your main residence which you are selling, then it was exempt from the extra 3% levy.

[Ozzie Osmond]

• ANY second property get the +3% surcharge.

• Jointly owned properties get the +3% surcharge unless NEITHER joint owner already owns ANY property.

In your case it sounds as though the +3% surcharge is inevitable.

[Sarnie]

Ozzie Osmond said:

* ANY second property get the +3% surcharge.

• Jointly owned properties get the +3% surcharge unless NEITHER joint owner already owns ANY property.

In your case it sounds as though the +3% surcharge is inevitable.

Yep, partner will own two properties upon completion.............

[crashley]

Hold on... you have me panicked here. Even if the new purchase is your primary residence, you still get whacked for 3% additional? I ask as i will be completing late April/early May... i'm selling main home to buy another, but i own and rent out my old flat.

[Ozzie Osmond]

crashley said:

Hold on... you have me panicked here. Even if the new purchase is your primary residence, you still get whacked for 3% additional? I ask as i will be completing late April/early May... i'm selling main home to buy another, but i own and rent out my old flat.

Yes, you are dead centre in the category to pay this additional Stamp Duty.

The ONLY way to avoid the tax would be for you to sell BOTH your existing properties and by one new house.

You don't have to sell them before you buy the new home but they must be sold within 36 months. If the sales are after the purchase you will need to pay the +3% up front and then have the right to reclaim it later after the sales.

Edit: 36 months for sale on main residence replacement.

Edited by Ozzie Osmond on Thursday 31st March 15:37

[Sheepshanks]

Ozzie Osmond said:

crashley said:

Hold on... you have me panicked here. Even if the new purchase is your primary residence, you still get whacked for 3% additional? I ask as i will be completing late April/early May... i'm selling main home to buy another, but i own and rent out my old flat.

Yes, you are dead centre in the category to pay this additional Stamp Duty.

The ONLY way to avoid the tax would be for you to sell BOTH your existing properties and by one new house.

You don't have to sell them before you buy the new home but they must be sold within 18 months. If the sales are after the purchase you will need to pay the +3% up front and then have the right to reclaim it later after the sales.

I think that's wrong - there was some clarification in the budget and it doesn't apply to main residence replacement. I think some of the timings have changed too.

It's still very confusing though. I'm really not sure what happens in the OPs case, where they each already own a property.

[Eric Mc]

crashley said:

Hold on... you have me panicked here. Even if the new purchase is your primary residence, you still get whacked for 3% additional? I ask as i will be completing late April/early May... i'm selling main home to buy another, but i own and rent out my old flat.

The Stamp Duty rules have little to do with "Main Residence". It's more to do with "the only property you own".

If the property you are buying is "the only property you own" after you have bought it (whether you chose to live in it or not), it won't get the 3% surcharge.

[AndrewEH1]

Slightly off-topic, but me and my sister through inheritance own two houses 50% share each in both houses would we both be hit by the 3%? Neither of us own a house 'outright' just shares in these houses.

[Ozzie Osmond]

AndrewEH1 said:

Slightly off-topic, but me and my sister through inheritance own two houses 50% share each in both houses would we both be hit by the 3%? Neither of us own a house 'outright' just shares in these houses.

Yes, you would both be caught.

[AndrewEH1]

Ozzie Osmond said:

Yes, you would both be caught.

Thanks we were not aware (but are still at least 6 months away from selling so hadn't looked into it), another £12k to the tax man...

Edited by AndrewEH1 on Thursday 31st March 15:44

[Ozzie Osmond]

Sheepshanks said:

Ozzie Osmond said:

Yes, you are dead centre in the category to pay this additional Stamp Duty.

The ONLY way to avoid the tax would be for you to sell BOTH your existing properties and by one new house.

You don't have to sell them before you buy the new home but they must be sold within 18 36 months. If the sales are after the purchase you will need to pay the +3% up front and then have the right to reclaim it later after the sales.

I think that's wrong - there was some clarification in the budget and it doesn't apply to main residence replacement. I think some of the timings have changed too.

I believe the only change is extending the "main residence replacement" period to 36 months and I've updated the post accordingly. Thanks for that.

Sheepshanks said:

I'm really not sure what happens in the OPs case, where they each already own a property.

Both of them are toast. If any joint owner owns something else then the WHOLE of the property gets the +3%.

[Sheepshanks]

Eric Mc said:

The Stamp Duty rules have little to do with "Main Residence". It's more to do with "the only property you own".

There must be about 50 references to "Main Residence" in the guidance, so I'm guessing it's quite important. https://www.gov.uk/government/uploads/system/uploa...

ETA: The critical part (Condition D) has a triple negative which hurts my head!

Edited by Sheepshanks on Thursday 31st March 15:59

[Sheepshanks]

Ozzie Osmond said:

Sheepshanks said:

Ozzie Osmond said:

Yes, you are dead centre in the category to pay this additional Stamp Duty.

The ONLY way to avoid the tax would be for you to sell BOTH your existing properties and by one new house.

You don't have to sell them before you buy the new home but they must be sold within 18 36 months. If the sales are after the purchase you will need to pay the +3% up front and then have the right to reclaim it later after the sales.

I think that's wrong - there was some clarification in the budget and it doesn't apply to main residence replacement. I think some of the timings have changed too.

I believe the only change is extending the "main residence replacement" period to 36 months and I've updated the post accordingly. Thanks for that.

Sheepshanks said:

I'm really not sure what happens in the OPs case, where they each already own a property.

Both of them are toast. If any joint owner owns something else then the WHOLE of the property gets the +3%.

You'll probably turn out to be an expert (and I'm not) but even the consultation information said the higher rate wouldn't be payable on main residence exchange. So I think crashley is OK.

[Sarnie]

AndrewEH1 said:

Thanks we were not aware (but are still at least 6 months away from selling so hadn't looked into it), another £12k to the tax man...

Edited by AndrewEH1 on Thursday 31st March 15:44

As per the second example on the second page of this document from Nationwide;

http://www.nationwide-intermediary.co.uk/includes/...

[Sheepshanks]

Sarnie said:

As per the second example on the second page of this document from Nationwide;

http://www.nationwide-intermediary.co.uk/includes/...

...and the first example of when the higher rate of SDLT won’t apply applies to crashley.

[Sheepshanks]

Ozzie Osmond said:

We are all agreed that main residence purchase or exchange is exempt. If I have given an impression to the contrary I apologise.

Careful....my reading is you've got to already have one, so a first purchase of a main residence wouldn't be exempt if you already owned a BTL. Only an exchange of your existing main residence.

[Broomfondle]

snorky782 said:

I thought if it was replacing your main residence which you are selling, then it was exempt from the extra 3% levy.

This is what made me think we'd be OK. The examples on the gov website seems to suggest this is the case.

My head hurts.

[Ozzie Osmond]

Sheepshanks said:

You'll probably turn out to be an expert (and I'm not) but even the consultation information said the higher rate wouldn't be payable on main residence exchange. So I think crashley is OK.

We are all agreed that main residence exchange is exempt. If I have given any impression to the contrary I apologise.

My concern about the OPs situation is that they seem to have an ongoing second property in the picture which is not going to be a main residence.

Put simply, I'm pretty sure you can't move out of one house, buy a new one under the "main residence" exemption, and then keep the first house as a second home or BTL.

[Sheepshanks]

Broomfondle said:

snorky782 said:

I thought if it was replacing your main residence which you are selling, then it was exempt from the extra 3% levy.

This is what made me think we'd be OK. The examples on the gov website seems to suggest this is the case.

My head hurts.

Despite my many posts in this thread, don't take this as Gospel, but I think you're stuffed as you're not also replacing your partners main residence.