2nd Property -SDLT Changes - Have Your Say

Doozergirl

carpediemspirit wrote: »

Somebody has created a petition:

https://petition.parliament.uk/petitions/114140

But given the level of responses, it clearly is not garnering enough attention as the tax credits.

Why would it? Indeed, why should it?

willowandy

First of all, I agree with the principle of taxing second homes, but I seem to be particularly unlucky here. My situation:

I was just able to buy a small studio flat when I separated from my ex - I could not afford a long term place to live as it was effectively a second mortgage, with our joint one counting fully against both of us.

I met somebody over a year after separating and later we rented a slightly larger studio flat as mine is too small for two people. I let out my own studio flat; it has now been let out for just under 16 months.

We are looking at buying our own place. So we do not own our main residence and would be moving from one main residence to another. But reading the draft under consultation, I don't think that technically counts as "replacing".

I think that means we would need to pay extra stamp duty on the new place rather than the one let out, unless:

* The studio flat is sold at the same time and also within the next 2 months because of the 18 month rule (which is practically impossible due to the archaic leases and conveyancing process in England).

* We, or at least I squeeze into my studio flat plus self-storage for a short while and the flat is sold within the next 18 months thereafter, if not at the same time as purchasing a place suitable for 2 (that, of course, means the current tenant will have to leave).


Have I understood that right?


If so, again, I think it completely fair that I should either sell the small flat or pay extra SDLT on it.
But more than doubling the SDLT on what would be our primary and quite possibly only residence seems harsh.

Why on earth not explicitly charge the SDLT on a flat/house that is *not* a main home/primary residence, ie. any property where the owner does not live, certainly any place with a buy to let mortgage on it?

Daniel54

willowandy wrote: »

I think that means we would need to pay extra stamp duty on the new place rather than the one let out, unless:

* The studio flat is sold at the same time and also within the next 2 months because of the 18 month rule (which is practically impossible due to the archaic leases and conveyancing process in England).

* We, or at least I squeeze into my studio flat plus self-storage for a short while and the flat is sold within the next 18 months thereafter, if not at the same time as purchasing a place suitable for 2 (that, of course, means the current tenant will have to leave).
Have I understood that right?

I think you are getting confused .It is not clear what you understand by the 18 month rule,but in any case it does not apply in your position,as you have no existing primary residence to sell.

If you keep the studio flat and then buy a second property to live in,the second purchase will indeed attract the higher level of SDLT

If you aim to sell the studio ,there is no 18 month rule .You would just need to ensure you completed on the sale of the studio before you complete on the purchase

willowandy

By the 18 month rule I meant that we *must* chain the flat into any purchase (disadvantage) or we will get a large extra SDLT bill for the new place, which we cannot reclaim if we completed later than the penultimate week of March.

Unless I lived in the flat (again) within 18 months of completing the sale of it. In that case it would be possible to reclaim later. That was the impression I got from reading the consultation document.

Last year I got the impression from various articles and threads that it would not apply to primary residences full stop.

I find it amazing that the legislation is being consulted on and adjusted so close to its introduction date - as a chained purchase can easily take over half a year, it makes it hard to plan if you are in an unusual situation..

I think the more fair thing would be to tax the flat rather than the primary residence. That being said, we might not be able to afford anywhere without selling the flat anyway..!