Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Tigglets
    • By Tigglets 20th Mar 17, 3:09 AM
    • 1Posts
    • 0Thanks
    Tigglets
    Second home stamp duty?
    • #1
    • 20th Mar 17, 3:09 AM
    Second home stamp duty? 20th Mar 17 at 3:09 AM
    i have elderly parents (76) that now need caring for so we thought the best option was to buy a bigger house and have them live with us. They will be gifting me some of the deposit but the mortgage is under my name entirely as they are too old. The issue is I'm struggling to sell my house quick enough as we have found the ideal property so I thought I'd rent my small house out. The problem is with the second home stamp duty! It looks that even though the new house will be my main residence I will have to pay the higher rate of stamp duty on it under the new rules, this means I can't afford to move. This feels entirely unfair as it will be my main residence and I'm trying to care for my parents which alternatively would have to go into a home which would cost the state??crazy!
Page 1
    • G_M
    • By G_M 20th Mar 17, 4:37 AM
    • 38,455 Posts
    • 43,546 Thanks
    G_M
    • #2
    • 20th Mar 17, 4:37 AM
    • #2
    • 20th Mar 17, 4:37 AM
    1)Yes, you'll have to pay the additional SDLT as you'll be buying a 2nd property.

    2) But you'll be able to claim it back provided you sell you current property within 3 years, since you're moving from one main residence to a new main residence

    3) the risk is that you let the property for too long. There's no guarantee tenants will leave when you want/expect them to, so trying to sell again in, say, 2.5 years time would be a gamble

    4) I doubt if your parents going into a care home would cost the state money. How much are they gifting you? How much equity is there in their current home? What other savings/investments do they have? If the total is more that £23,250K, they would probably not receive state funding.

    5) It may feel unfair, but a) all tax feels unfair! and b) the 3 year rule on re-claiming SDLT is a very generous period of time to sell your property.

    6) As for letting your property, these links may help:



    Tenancies in Eng/Wales: Guides for landlords and tenants This thread is intended to provide information to both landlords and tenants relating to Assured Shorthold Tenancies (ASTs) in England and Wales.

    Topics covered:

    * Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new protection (2015)

    * Deposits:
    payment, protection and return

    * Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

    * Rent increases: when & how can rent be increased?

    * Repossession: what if a LL's mortgage lender repossesses the property?

    * New landlords: advice, information & links

    * Letting agents: how should a landlord select or sack?
    • AdrianC
    • By AdrianC 20th Mar 17, 7:32 AM
    • 13,195 Posts
    • 11,532 Thanks
    AdrianC
    • #3
    • 20th Mar 17, 7:32 AM
    • #3
    • 20th Mar 17, 7:32 AM
    The issue is I'm struggling to sell my house quick enough as we have found the ideal property so I thought I'd rent my small house out. The problem is with the second home stamp duty!
    Originally posted by Tigglets
    You now own one house, your main residence.
    You will own two houses, your main residence and a rental property.

    Why, in that situation, would the SDLT surcharge NOT apply...?

    I could understand your confusion if your parents would be living in your second property - but they aren't. You will be renting it. If your existing house won't sell, then it's too expensive. Reduce the price. Does it actually make sense as a rental property?

    If you sell your previous main residence within three years of buying your new main residence, then the 3% is reclaimable.
    • Keep pedalling
    • By Keep pedalling 20th Mar 17, 8:17 AM
    • 2,714 Posts
    • 2,853 Thanks
    Keep pedalling
    • #4
    • 20th Mar 17, 8:17 AM
    • #4
    • 20th Mar 17, 8:17 AM
    If your parents are not putting their entire wealth into this gift, could they not lend you the 3% until the sale goes through?

    If on the other hand this gift leaves them with little or no assets, then stamp duty is not the only thing to worry about. What happens to them if you run into financial difficulty through ill health, redundancy or divorce?
    • spendinglikemad
    • By spendinglikemad 20th Mar 17, 8:26 AM
    • 191 Posts
    • 1,440 Thanks
    spendinglikemad
    • #5
    • 20th Mar 17, 8:26 AM
    • #5
    • 20th Mar 17, 8:26 AM
    Exactly same situation here - we just have to pay the extra stamp duty and claim it back when we sell hopefully later this year
    SLM
    Family of 4 plus cat!
    • teddysmum
    • By teddysmum 20th Mar 17, 1:38 PM
    • 6,832 Posts
    • 4,005 Thanks
    teddysmum
    • #6
    • 20th Mar 17, 1:38 PM
    • #6
    • 20th Mar 17, 1:38 PM
    Also, what if they become too unwell for you to care for them (will you give up work and care 24 hours/day) ? Many a determined person has had to give up because they can't cope, especially in the case of dementia, which most of us dread.


    If they give you their money and don't have enough to pay for care needs, they will still be assessed as having that money and will get no state help. (See items on deprivation of assets).
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

262Posts Today

3,540Users online

Martin's Twitter