Could I sue for being mis-sold

moneybunny123

CLAPTON wrote: »

just to say

capital gains tax is only paid on the GAIN ; currently you are showing a loss

in addition even if there was a gain, you have
- a reduction because you lived there for two year plus the last three years
- a reduction 'lettting releif' up to 40,000
and you have a yearly cgt allowance of 10,100

there is in short absolutely no possibility of paying any capital gains tax for many years

Definitely?! I SO hope you're right, because that changes A LOT. You say you only pay it on the GAIN (as the name suggests!). I'd just assumed you pay it on the profit. Remember, I bought the house putting down a £64k deposit. I'm likely to only come out with between £40k and £50k based on market valuations, so would I not pay the CGT on the £40-50k? After all, it is a gain of sorts. You also say that I'd get a reduction because I lived there for two years plus the last three years. I actually lived there for just over three years, but haven't lived there for two years. Next January, it will be three years that I haven't lived there - which is when I was told I'd have to have the house sold by to avoid CGT.

What you say is very interesting - I hope you're right.

Flyboy152

mandbaby wrote: »

You're wrong, actually, so the "facts" you refer to are actually not the facts at all! But that probably doesn't matter to you!? As I explained before, I tried to sell the house over two and a half years ago (before I was pregnant with my first child), but couldn't find a buyer - even when I dropped the price by 10% (which at that time it was still above what I originally paid). I couldn't sell it, so rented it out instead. Hardly financially IRRESPONSIBLE, is it?! I did what I could at the time.

I though that was quite an accurate summation of the thread.

If you had been that desperate to sell two and a half years ago, you would have marketed the property at a reasonable price. Meanwhile, the value has slipped and slipped, leaving you and your partners in a worse position.

Have you got the agreement of the developers and your mortgage lenders to let the property?

Flyboy152

mandbaby wrote: »

No, of course not. And nor do they provide 25% of the mortgage, or 25% of the thousands I spent on the place to improve it (fire, carpets, landscaping the garden, etc, etc, etc)

But they gave you twenty-five per cent of the value of the property as it stood when you moved in. Interest on that amount goes way beyond what you have spent on it, let alone the depreciation.

Flyboy152

mandbaby wrote: »

This does sound like a plan, but I'm gonna have to sell it before next January, because if I don't I wont have lived there for three years, which means (unless I'm mistaken?) that I'll be liable for capital gains tax.

I genuinely thank everyone who's taken the time to reply. I think that realistically I have 2 choices:

1. Talk to the tenants, reduce their rent for the time-being on the proviso that they show potential buyers around, and I give them up to two months notice once a buyer is found.
OR
2. Bite the bullet, give them two months notice immediately, get the place spruced up at Easter, get it on the open market and pray very hard.

Anybody wanna buy a lovely 3 bed, 2 bath house with garage and off-road parking?!

I wouldn't worry, you haven't gained anything.

But, nonetheless I think this is your best option. But I would re-consider dropping the rent, I can't see any need to. If the tenants want to go, they will go.

Have you considered the auctions?

N.B. I suspect you will need to discuss that with the developers first, but they might not object if you suggest a realistic reserve.

Flyboy152

CLAPTON wrote: »

just to say

capital gains tax is only paid on the GAIN ; currently you are showing a loss

in addition even if there was a gain, you have
- a reduction because you lived there for two year plus the last three years
- a reduction 'lettting releif' up to 40,000
and you have a yearly cgt allowance of 10,100

there is in short absolutely no possibility of paying any capital gains tax for many years

And last year's.

ViolaLass

mandbaby wrote: »

Remember, I bought the house putting down a £64k deposit. I'm likely to only come out with between £40k and £50k based on market valuations, so would I not pay the CGT on the £40-50k?

No, because it's not profit. For it to be profit, you would have to get out MORE than you put in.

moneybunny123

Flyboy152 wrote: »

I though that was quite an accurate summation of the thread.

If you had been that desperate to sell two and a half years ago, you would have marketed the property at a reasonable price. Meanwhile, the value has slipped and slipped, leaving you and your partners in a worse position.

Have you got the agreement of the developers and your mortgage lenders to let the property?

I wasn't THAT desperate to sell. Yes, it would have been nice, but at the time I didn't want to take a loss. NOW, however, I think I'd rather cut my losses BUT on finding out that I wont have to pay capital gains tax in a years time (except on any profit which I find perfectly acceptable) then I MIGHT hang on to it, and see if the market improves.

And yes, I have their agreement. As I mentioned earlier, Halifax INSISTED I change to a BTL mortgage (even though lots of other lenders let you stay on your current deal as long as you pay a small admin fee to get their approval. I had to change to a higher rate than I was on, and with a hefty (£1k) admin fee. The Halifax are like !!!!!! Turpin.

GDB2222

That 65% now and 35% in 5 years' time is going to be difficult to tie down, because you'll need security for your 35%, ie a first charge on the property. The buyer's idea is possibly that they will raise a 65% mortgage on the property, but they won't be able to do that if you have a first charge. Did they say how they were going to structure this? If not, you are just wasting your time, really.

As far as your tenants are concerned, I hope that you haven't issued them with a new lease since they moved in 2 years ago? They should simply hold over on the existing lease, which means you can give them two months notice to leave. That may make it possible to sell the property to an ordinary purchaser. You'll need to discuss with the tenants whether they'll keep the place nice and tidy and allow viewings - maybe some reduction in the rent will sweeten them.

melmo

I'm no expert but I am a FTB and I wouldn't even bother looking around a house with tenants, as I'd be worried that it might take months go actually get them out if they decided not to go and had to be evicted

Flyboy152

Then you restricting your options to a narrower band of choices.