Avoiding stamp duty hike...

moneymark

Hi there,

I'm planning to port my current residential mortgage across to a new property I plan to live in. I then plan to get a let to buy on my current property.

I spoke to my solicitor yesterday and as far as she could tell, with this being the case she thought I would avoid paying the double stamp duty hike at the end of March.

Does anyone know if this is correct?

Thanks in advance.

Mark

amnblog

As the intended legislation currently sits you need to complete the purchase by 31st March latest.


Get a shift on, and make sure whomever is handling the mortgages knows what they are doing.

moneymark

Thanks, this is what the solicitor is telling me -


If you are purchasing the property on a buy to let basis – we must complete by the end of March or stamp duty will be at the higher rate.

If you are purchasing the flat to move into – then this is not a buy to let and SD will be at the current rate.

The let to buy re-mortgage on your current residential property will not attract any SD as it is a remortgage.

Confused!

ACG

My understanding is ANY second property which completes after the 31st March will incur the extra stamp duty.

So as your post reads, if you are not done and dusted by the 31st your going to incur the extra 3%.

Playing_with_Fire_2

Also, have you checked with the mortgage company that you can port the mortgage if you are not selling the current propoerty - mine wouldn't let me do this (I was on a lovely low SVR!).

Senior_Paper_Monitor

If the port/purchase takes place on/after 1st April you pay the extra SDLT.

Whatever you do with current property (in terms of remortgaging) does not have an SDLT impact.

Daniel54

moneymark wrote: »

Thanks, this is what the solicitor is telling me -

If you are purchasing the property on a buy to let basis – we must complete by the end of March or stamp duty will be at the higher rate.

If you are purchasing the flat to move into – then this is not a buy to let and SD will be at the current rate.

The let to buy re-mortgage on your current residential property will not attract any SD as it is a remortgage.

Your solicitor has obviously not read the Treasury consultation document on this subject. It seems entirely possible that the final rules will in large part follow the terms of the consultation

If you complete the transaction on a second property on or after 1st April you will pay the additional 3% SDLT

In your case,if you sold your current home within 18 months of completing the transaction,you would be able to reclaim the additional tax.

https://www.gov.uk/government/consultations/consultation-on-higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties/higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties

theGrinch

The way Osborne has worded it seems to mean a great many home movers will be caught out by the 3% and will need to reclaim the funds back (though no mechanism has been specified for doing this just yet).

I can only see this slowing SDLT revenues as supply drops as people are deterred from moving due to the significantly large outflow they need to fork out before reclaiming.

In London this could be tens of thousands on already taxed income for average properties in average areas.

Tax incentives to downsizers would help to free up housing stock in my humble opinion.

kingstreet

theGrinch wrote: »

Tax incentives to downsizers would help to free up housing stock in my humble opinion.

As there's no CGT on PPRs what tax incentives could be offered?