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  • FIRST POST
    • Moderatelymod2
    • By Moderatelymod2 12th Jun 17, 7:32 PM
    • 3Posts
    • 0Thanks
    Moderatelymod2
    Avoid higher rate stamp duty on 2nd property
    • #1
    • 12th Jun 17, 7:32 PM
    Avoid higher rate stamp duty on 2nd property 12th Jun 17 at 7:32 PM
    Hi all, can anyone advise if we are liable for or can avoid the higher rate of stamp duty on a 2nd property, if the facts are:

    Property 1
    I have a mortgaged with a friend - purchased approx 10 years ago.
    This property has not been my residence for 4 years.
    We would sell it but it is in a lot of negative equity.
    It is now let out.

    Property 2
    My fianc! (a different person than property 1) and I are now buying a property which will be our sole residence.
    She is a first time buyer, obviously I am not.

    Also, would the outcome be any different if we were married before the sale was complete?

    I have become an unwilling landlord due to economic downturn. It seems very unfair that I am penalised yet again when buying what will be my marital home and only residence.

    I would be very grateful if someone can advise or speak from a similar experience.
Page 2
    • Mortgage_Adviser
    • By Mortgage_Adviser 13th Jun 17, 11:18 AM
    • 2 Posts
    • 6 Thanks
    Mortgage_Adviser
    The property may not be in the same geographical location to where the OP lived and works now.
    Also what money would he offer to his business partner for the negative equity?
    Eg we both own the house which is after the ,mortgage is taken in to consideration is worth - (minus) £20,000. So technically his business partner would need to pay the OP to get off the bad investment.
    • Red-Squirrel
    • By Red-Squirrel 13th Jun 17, 11:26 AM
    • 1,428 Posts
    • 3,585 Thanks
    Red-Squirrel
    The property may not be in the same geographical location to where the OP lived and works now.
    Also what money would he offer to his business partner for the negative equity?
    Eg we both own the house which is after the ,mortgage is taken in to consideration is worth - (minus) £20,000. So technically his business partner would need to pay the OP to get off the bad investment.
    Originally posted by Mortgage_Adviser
    He could live in it and rent the partner's half from him.
    • nubbins
    • By nubbins 13th Jun 17, 12:53 PM
    • 682 Posts
    • 918 Thanks
    nubbins
    Watch out HPC are watching
    • mrginge
    • By mrginge 13th Jun 17, 1:11 PM
    • 4,039 Posts
    • 7,075 Thanks
    mrginge
    No, but they have a capital loss. On disposal, that loss can be relieved. Why not against SDLT? There is no logical reason why not - it was incurred in a residential property transaction - exactly like the next transaction. This was, like most recent tax changes, put through on the quick by an incompetent treasury.
    Originally posted by bob bank spanker
    well this really is nonsense.

    There is no capital loss until the asset is disposed of.
    And then there won't be any additional SDLT to pay.
    • ScoTTyBEEE
    • By ScoTTyBEEE 13th Jun 17, 1:25 PM
    • 7 Posts
    • 4 Thanks
    ScoTTyBEEE
    wish I could afford to buy 2 houses...
    Originally posted by csgohan4
    Don't worry. You might wake up one day, and realise by complete accident you've become a landlord.

    It seems to happen all the time.
    • csgohan4
    • By csgohan4 13th Jun 17, 1:26 PM
    • 3,567 Posts
    • 2,239 Thanks
    csgohan4
    Don't worry. You might wake up one day, and realise by complete accident you've become a landlord.
    Originally posted by ScoTTyBEEE
    not really, sell it immediately, being a LL is more pain than pleasure tbh
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • Moderatelymod2
    • By Moderatelymod2 13th Jun 17, 5:38 PM
    • 3 Posts
    • 0 Thanks
    Moderatelymod2
    Wow.. I thought this was a forum for those seeking advice, not abuse.

    So thank you to those who posted helpful information, even if it was not what I wanted to hear.

    If the SDLT is such that I must pay, then I shall. I was just wondering if my circumstances were cause for an exemption. I don't see the need for vitriol and ridicule.

    I accept that there are many people less fortunate than I, however those quick comment done so without knowing my background or the full story.

    You would have thought that I was some slumlord with streets of properties & the sole cause of the social housing crisis. I'm hardly Donald Trump!

    I am just a man, that foolishly bought a small flat with his mate out or fear that we'd never get on the ladder. It was never our intention to become landlords.

    The reason I don't live there now is because I had to move for work. Even if I did still live there, I do not have the cash to pay the negative equity/buy out my "business partner"

    I'm guessing there are many people out there in similar circumstances, I hope they find you lot more sympathetic.
    • AdrianC
    • By AdrianC 13th Jun 17, 5:52 PM
    • 14,710 Posts
    • 13,078 Thanks
    AdrianC
    Wow.. I thought this was a forum for those seeking advice, not abuse.
    Originally posted by Moderatelymod2
    It is. Any abuse you have received is out of order, although I don't see any myself. I see some answers that aren't sugar-coated, but sugar-coating isn't particularly helpful anyway.

    So thank you to those who posted helpful information, even if it was not what I wanted to hear.
    I can only speak for myself, but - my pleasure.

    If the SDLT is such that I must pay, then I shall. I was just wondering if my circumstances were cause for an exemption.
    No, they are not.

    You own one property now.
    You will own two properties at the end of this.
    SDLT +3%.

    It's that easy.

    I am just a man, that foolishly bought a small flat with his mate out or fear that we'd never get on the ladder.
    No problem with that...

    It was never our intention to become landlords.
    Yet you did decide to become landlords... Didn't you?
    You took the conscious decision to enter the residential property letting business.
    You informed your mortgage lender, and obtained consent to let (you did, right?).
    You found a tenant.
    You signed a tenancy.
    You took and protected a deposit (you did, right?).
    You collected rent (no need to ask about that one...)
    You maintained the property for the tenant (you did, right?).
    You made sure all your other legal obligations were up to date (you did, right?)
    You paid tax on that rent (you did, right?)...

    Even if I did still live there, I do not have the cash to pay the negative equity/buy out my "business partner"
    Why the quote marks? He IS your partner in your residential property lettings business activities.

    Yet you have the money for a deposit on the property you're buying now? This is another conscious decision you are making, to maintain your residential property letting while buying a second property as your main residence. You are trying to justify that decision with this claim - but, as justification, it holds no water.

    You may feel it is better value for you to pay the 3% SDLT than it is to cut your losses on your poor investment, while it is still at least covering the ongoing costs and perhaps even bringing you some income. Great. That's a valid justification.

    You would prefer to pay less tax arising from your business activities. Well, who wouldn't...?

    I'm guessing there are many people out there in similar circumstances
    Many, yes.

    I hope they find you lot more sympathetic.
    They will. If they don't try to play the poor-hard-done-by card in an attempt to evade their legal responsibilities.
    Last edited by AdrianC; 13-06-2017 at 5:55 PM.
    • caronoel
    • By caronoel 13th Jun 17, 6:01 PM
    • 679 Posts
    • 884 Thanks
    caronoel
    The vitriolic small minded fools over on HPC are now trying to stir it up on here:
    http://www.housepricecrash.co.uk/forum/index.php?/topic/230297-another-poor-soul-on-mse/#comment-1103247470

    What a bunch of pathetic losers
    • AdrianC
    • By AdrianC 13th Jun 17, 6:04 PM
    • 14,710 Posts
    • 13,078 Thanks
    AdrianC
    The vitriolic small minded fools over on HPC are now trying to stir it up on here:
    http://www.housepricecrash.co.uk/forum/index.php?/topic/230297-another-poor-soul-on-mse/#comment-1103247470

    What a bunch of pathetic losers
    Originally posted by caronoel
    Oooh, the hidden sub-forum? I feel all... left out.

    It must exist, right? It can't possibly be a figment of their fevered conspiracy-ridden minds, right?
    (and they can't possibly be stupid enough to mean the very un-hidden "debate house prices" forum, can they?)
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