Stamp Duty and Second Homes

hillabaloo

I wonder if anyone can help.

We are retired and we sold our main residence in 2014 and have since been staying with family (mother-in-law and son) and spending time in our holiday home in Spain. We have taken our time in deciding where to live in the UK because family and friends are so dispersed.

My question is: will we have to pay the additional 3 per cent on buying our main residence? It is unlikely now that we can find a property and complete before the April deadline.

My understanding is that second home owners who sell their main residence and buy a new main residence will not have to pay.

But we sold ours in 2014.

Grateful for any advice.

pmlindyloo

The additional stamp duty is only for Buy to Let properties when the buyer already has a main home.

So, no, you won't have to pay the additional stamp duty.

alchemist.1

pmlindyloo wrote: »

The additional stamp duty is only for Buy to Let properties when the buyer already has a main home.

So, no, you won't have to pay the additional stamp duty.

That is incorrect.

alchemist.1

I'm not sure your potential purchase of a home counts as an additional property if the initial one is abroad. If it does then you will have to pay the additional 3%.

Edit : Reading articles on the subject , it suggests that the properties abroad will be taken into account.

Bluebirdman_of_Alcathays

pmlindyloo wrote: »

The additional stamp duty is only for Buy to Let properties when the buyer already has a main home.

So, no, you won't have to pay the additional stamp duty.

Why comment if you don't know what you're talking about? The new rules have nothing to do with buy to let, and are about how many homes you own after the transaction.

OP property owner globally is factored in when making the calculation. Read just after example 30 in the below link. If I'm reading it correctly (and the consultation becomes law), you will be liable for the extra 3%.


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

joeistheone

If you are keeping the holiday home in Spain, based on current guidance, the acquisition of another home in the UK will count as a second property so you would be liable to the 3% stamp duty land tax 'surcharge'.

AnotherJoe

My understanding is that second home owners who sell their main residence and buy a new main residence will not have to pay.

=====

Your understanding is incorrect. Its nothing to do with residence (or as another poster has incorrectly stated, buy to let).

AIUI its simply if you buy a second or indeed subsequent, property (might be a third or fourth or more). Doesn't matter if its residential you might not live in any of them. You'll be buying a second property. Most people seem to think that one abroad qualifies, the question of course is how would anyone know ?

The rules AIUI arent firm yet though and seem to penalise those who might own even a share of a small flat abroad when the whole intent of the policy is to dissuade people owning multiple homes in this country. Whether they change or are updated before April, no idea though I suppose it would be hard to get sympathy for someone who owns a second home abroad, and whats the difference (apart from the weather) having a holiday let in Benidorm or Bognor?

Like most policies, poorly thought through with many unintended consequences.

dimbo61

Does this mean that EVERY foreign investor will in fact pay the 3% extra stamp duty ?
This should see the London market come crashing down real soon.

pmlindyloo

Bluebirdman_of_Alcathays wrote: »

Why comment if you don't know what you're talking about? The new rules have nothing to do with buy to let, and are about how many homes you own after the transaction.

OP property owner globally is factored in when making the calculation. Read just after example 30 in the below link. If I'm reading it correctly (and the consultation becomes law), you will be liable for the extra 3%.


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

Bit harsh Have you never made a mistake????

I stand corrected but it does have something to do with Buy to Let and most articles centre on this, maybe because the purchases of additional homes often involve buy to let.

This is, I believe, (I am sure you will correct me if I'm wrong,) still under consultation so could be changed.

Cannot find anything in the Autumn statement that refers to properties abroad. Is this documented somewhere else?

From the autumn statement
Property taxes
3.70 Stamp duty land tax: additional properties – Higher rates of SDLT will be charged
on purchases of additional residential properties (above £40,000), such as buy to let properties
and second homes, from 1 April 2016. The higher rates will be 3 percentage points above the
current SDLT rates. The higher rates will not apply to purchases of caravans, mobile homes or
houseboats, or to corporates or funds making significant investments in residential property
given the role of this investment in supporting the government’s housing agenda. The
government will consult on the policy detail, including on whether an exemption for corporates
and funds owning more than 15 residential properties is appropriate. The government will use
some of the additional tax collected to provide £60 million for communities in England where
the impact of second homes is particularly acute. (5)
3

AnotherJoe

Cannot find anything in the Autumn statement that refers to properties abroad. Is this documented somewhere else?
=====

It doesn't really need to be documented, since it doesn't specify "in the UK" then by default it applies to all homes.

AnotherJoe

dimbo61 wrote: »

Does this mean that EVERY foreign investor will in fact pay the 3% extra stamp duty ?
This should see the London market come crashing down real soon.

I was thinking that too. I dont know if it only applies to UK residents. Its all a big mess really.