Stamp duty advice Buy-to-Let

[The Stiglet]

Looking for a bit of unofficial advice please as I've received conflicting feedback.

We are thinking about changing our primary residence mortgage to a buy to let and purchasing a larger primary residence.

The mortgage advice I received suggests that we need to pay the extra 3% stamp duty on the new primary residence, which I don't understand. An accountant told me yesterday that he thinks this is correct but you can then claim the stamp duty back against the value of the buy to let property.

What is your understanding?

Thanks

[Sarnie]

The extra 3% SDLT is due as you will own two properties at the point of completion.

You can have this rebated if the BTL is sold within 36 months of purchasing the new property.

[The Stiglet]

Sarnie said:

The extra 3% SDLT is due as you will own two properties at the point of completion.

You can have this rebated if the BTL is sold within 36 months of purchasing the new property.

Thanks for the feedback.

We don't have any intention of selling the BTL within that time period unfortunately. However, I don't understand how the 3% SDLT can be taken against the value of the primary residence purchase when it is the primary residence and not a 2nd property, which the BTL is?

Is there another way to do this?

[Eric Mc]

When you buy the second property, how many properties will you own?

If the answer is "two", you will pay the extra 3% when you buy this additional property.

[nitrodave]

Eric Mc said:

When you buy the second property, how many properties will you own?

If the answer is "two", you will pay the extra 3% when you buy this additional property.

i believe this is correct. It doesn't mater which you live in and rent. You own one already, so can't pay stamp duty on that - again. You pay extra stamp duty on whatever you buy second time round.

[98elise]

Eric Mc said:

When you buy the second property, how many properties will you own?

If the answer is "two", you will pay the extra 3% when you buy this additional property.

I think the important bit here is "second property". The fact its BTL or Residential doesn't matter as far as I understand it. If you are purchasing a second property then the new tax applies, if you sell the other property in a given time frame then you get it back.

[Jockman]

98elise said:

I think the important bit here is "second property". The fact its BTL or Residential doesn't matter as far as I understand it. If you are purchasing a second property then the new tax applies, if you sell the other property in a given time frame then you get it back.

It really is as simple as that......but us being humans will constantly try and find clever ways around it

It's why the tax system is so complicated. It's forever closing loopholes.

[Googie]

With apologies to the OP but would like to ask a follow up question here please. If its the case that a BTL is already in place does the additional SDLT levy apply if you were to sell an existing principal residence and move to a new one. I assume the answer is yes but would appreciate confirmation on this point

Thanks
G

[Jockman]

No

[Jockman]

From HMRC. The only thing I can see as having changed is 18 months to 36 months.

[Googie]

Thanks for the prompt and clear feedback Jockman-really appreciated.

[The Stiglet]

Thanks guys

[wezo]

Does anybody know if it still counts if one property is in England and the second in Scotland - they have different tax thresholds, so I wondered if they are treated separately in each country or not?

[Ozzie Osmond]

Check out this link to "Land and Buildings Transaction Tax" in Scotland,
https://www.stampdutycalculator.org.uk/stamp-duty-...

I think (but don't hold me to this) that Scotland is completely separate from England & Wales in terms of property law and taxes. Talk to your conveyancer to confirm. Meanwhile, here's another handy link,

http://www.theguardian.com/money/2016/jan/07/does-...

[SunsetZed]

wezo said:

Does anybody know if it still counts if one property is in England and the second in Scotland - they have different tax thresholds, so I wondered if they are treated separately in each country or not?

I beleive that it depends on where property 2 is being bought, if you're buying property two in England then you pay the additional 3% stamp duty regardless of whether property 1 is alrady owned in England, Scotland, Spain or wherever.