Discussion
Buying a house @ 350k , i want to keep my old house and use as let to buy , which means 25k stamp duty -im wondering if its is worth it ? (rents about 1150pmonth) its equiavalent to selling my old house 25k under normal value.I am aware that within 3 yrs i can reclaim Stamp duty if i sell old home , but it would feel like a deadline panic sale.Some say , swallow the 25k as i will gain far more in house values increasing
What is the old house worth?
Would you pay less stamp duty if you sold the old house to a LTD company (which you own), then buy the new house as your only dwelling?
DYOR.
The other thing is, if you don't sell, you have more freedom of timing your buy and can perhaps drive a harder bargain?
Things which don't look optimum in terms of tax can be the best/only way to secure the house you really want.
I'd advise you not to take advice from anyone here, including me.
Treat it as 'food for thought'.
Would you pay less stamp duty if you sold the old house to a LTD company (which you own), then buy the new house as your only dwelling?
DYOR.
The other thing is, if you don't sell, you have more freedom of timing your buy and can perhaps drive a harder bargain?
Things which don't look optimum in terms of tax can be the best/only way to secure the house you really want.
I'd advise you not to take advice from anyone here, including me.
Treat it as 'food for thought'.
OutInTheShed said:
What is the old house worth?
Would you pay less stamp duty if you sold the old house to a LTD company (which you own), then buy the new house as your only dwelling?
DYOR.
The other thing is, if you don't sell, you have more freedom of timing your buy and can perhaps drive a harder bargain?
Things which don't look optimum in terms of tax can be the best/only way to secure the house you really want.
I'd advise you not to take advice from anyone here, including me.
Treat it as 'food for thought'.
Old house worth about 230k (mortgage free).Yes, no chain helps in bargaining. LTD company route looks a bit complicated.It seems the amateur landlord is ditching BTL due to Stamp Duty costs .Would you pay less stamp duty if you sold the old house to a LTD company (which you own), then buy the new house as your only dwelling?
DYOR.
The other thing is, if you don't sell, you have more freedom of timing your buy and can perhaps drive a harder bargain?
Things which don't look optimum in terms of tax can be the best/only way to secure the house you really want.
I'd advise you not to take advice from anyone here, including me.
Treat it as 'food for thought'.
tali1 said:
Buying a house @ 350k , i want to keep my old house and use as let to buy , which means 25k stamp duty -im wondering if its is worth it ? (rents about 1150pmonth) its equiavalent to selling my old house 25k under normal value.I am aware that within 3 yrs i can reclaim Stamp duty if i sell old home , but it would feel like a deadline panic sale.Some say , swallow the 25k as i will gain far more in house values increasing
Is it your old house, or your old home? The extent of emotional attachment you have to it may end up determining how you feel about any decision to rent. Fwiw, every time I’ve had a home that I could have rented, I’ve sold and invested the money in rental properties that are purely business assets: makes it much easier if/when there’s any damage. A Ltd also has to pay additional SDLT: you’d only see a net saving if the difference in prices was significant.
Lastly, do you have the liquid resources to deal with 12 months missed rent and a refurb? That is your exposure if you get the tenant from hell.
Depends largely on what your marginal tax rate is - if you're a 40% tax payer and you rent the place for £1150 a month then £460 of that goes straight to the Government, leaving you with less than £700/m.
Also consider upkeep costs, insurance, void periods, cost of new tenants, etc.
It can work, but vs selling the house and paying that down on the mortgage, it might not be worthwhile.
Also consider upkeep costs, insurance, void periods, cost of new tenants, etc.
It can work, but vs selling the house and paying that down on the mortgage, it might not be worthwhile.
House prices have generally only risen in line with inflation for the last 15-20 years, so it’s unlikely you’ll get a huge capital gain in real terms. Then you’ll pay 28% CGT on it, or after this October’s Budget, probably 40%+.
You’ll take a £25k direct hit in SDLT. You can work out your yield by doing some research on what it will rent for, but it’s unlikely to be much more than 8%. Then inflation will devalue that, you’ll have to pay 22% or 42% tax on it, cover council tax during fallow periods between tenants, and pay for landlord’s insurance.
You will have to rent for a very very long time to get back your lost SDLT.
Conversely if you sell the property and invest then you’re very likely to get better returns with none of the aggro of being a landlord. The last 12 months has been pretty special, but even in the most conservative of UK or US trackers you would have got 15%+.
The prevailing sentiment is that it’s only worthwhile being a landlord now with a portfolio of at least 5 properties held in a Ltd company.
You’ll take a £25k direct hit in SDLT. You can work out your yield by doing some research on what it will rent for, but it’s unlikely to be much more than 8%. Then inflation will devalue that, you’ll have to pay 22% or 42% tax on it, cover council tax during fallow periods between tenants, and pay for landlord’s insurance.
You will have to rent for a very very long time to get back your lost SDLT.
Conversely if you sell the property and invest then you’re very likely to get better returns with none of the aggro of being a landlord. The last 12 months has been pretty special, but even in the most conservative of UK or US trackers you would have got 15%+.
The prevailing sentiment is that it’s only worthwhile being a landlord now with a portfolio of at least 5 properties held in a Ltd company.
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