Stamp duty on a self build......question

[timmy33]

Morning all,

Just wondering if anyone knows the answer to the following; if I buy a plot for say £90,000.... and maybe a year later I build a house on it that costs £80,000 for materials/labour etc.

Would I be exempt from stamp duty as the land at £90k is below the threshold and the cost of building the house is a seperate transaction?

Cheers.

Tim

[superlightr]

Timmy33 your heading in the right direction - property, property , property. all eggs etc..


I would say that you would only be liable for Stamp/land Tax on the sale price of the land at the time you buy it. Cant possible see how else they could do it.

You build a house and sell it would them be liable to CGT of the difference which is where they would get their pound of flesh. (unless main residence but you know this all ready.)

I think buying and building then selling/renting is the way forward over buying ready built then renting/selling as the returns are not there now.

[scotal]

AFAIK you pay stamp on the land not on the build (and you can reclaim the VAT on the build, or most of it at least). Therefore 90k is below the threshold.


Moneyweek article from Oct last year.
http://www.moneyweek.com/file/19290/avoid-estate-a...

As superlight has said if the place won't be your primary residence you will suffer from CGT if you sell.

Oh yeah, can I do your mortgage, selfbuild mortgages are fun.

[timmy33]

superlightr said:

Timmy33 your heading in the right direction - property, property , property. all eggs etc..

hello you.

Well it's not quite as though I'm intending to become a property magnate, don't worry! It's just for my own use, and to keep as a place to live in when I semi-retire ( I'm hoping that won't be too long. )

I'm looking into putting up a 4/5 bed Scnadia self build back where I hale from for when I've had enough of the SE.

Have you seen them? Very nice, and all sorts of designs, not just 'yodle' cabins. And very efficient, large windows, but triple glazed, also they are often designed with having a central wood burning stove as a main feature.....I'm looking at buying some woodland too....so free heating! ( well some free heating. )

Seems I can reclaim VAT, and I think you're right, stamp duty might be off too. Hope so!

Edited by timmy33 on Wednesday 30th May 13:29

[timmy33]

scotal said:

Moneyweek article from Oct last year.
http://www.moneyweek.com/file/19290/avoid-estate-a...

As superlight has said if the place won't be your primary residence you will suffer from CGT if you sell.

Oh yeah, can I do your mortgage, selfbuild mortgages are fun.

Thanks chap

Re CGT, nope intention is to regard it much in the same way as buying a car, it's a machine for a purpose, in this case me living in until I carp it, and I won't care about inheritance duty as the cat home will be getting it most likely.

Stamp duty exemption is great news though.

Mortgage shouldn't really be an issue, but I'll give you a shout if I need to find out about one.

Thanks again.

[johnfm]

As said, stamp duty only on the transfer of land. No CGT issue if you live in it - if you build it just to sell, still no CGT, as you are trading as a property developer, so tax will be on profit.

[superlightr]

Timmy33

where are you going back too?

can you point me in the direction of buying timber land please...


Im hoping to retire to McNowhere in Scotland in 20 yrs. If the wife will agree is another matter but then 5"5 body shapes are easy to hide in the highlands in the woods.

I hear the sensible money is now moving into timber and scandia houses....

[timmy33]

superlightr said:

Timmy33

where are you going back too?

can you point me in the direction of buying timber land please...


Im hoping to retire to McNowhere in Scotland in 20 yrs. If the wife will agree is another matter but then 5"5 body shapes are easy to hide in the highlands in the woods.

I hear the sensible money is now moving into timber and scandia houses....

I'm from the near the Malverns. Love it back there. Esp the mt biking, and oh so quiet A roads!

Try here www.woodlands.co.uk

Yes lumber is shooting up and you also have the inherent value of the land. Plus huge tax breaks. As well as the amenity value.....pheasant shooting, camping etc.

Scandia House.....£75k for a 200 sq m 4 bed. Plus land £90k, add on £35k for civils....... arond £200k should be an achievable budget.

Or a 1 bed flat in Reading town centre. Ewwwww.

Edited by timmy33 on Wednesday 30th May 14:31