Stamp Duty and Second Homes

booksurr

AnotherJoe wrote: »

Cannot find anything in the Autumn statement that refers to properties abroad. Is this documented somewhere else?
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It doesn't really need to be documented, since it doesn't specify "in the UK" then by default it applies to all homes.

although not yet confirmed in statute the intent is rather well documented in the policy statement as referred to in #5

"However, property owned globally will be relevant in determining whether a property purchased in England, Wales or Northern Ireland is an additional property. This means that if someone is purchasing their first or only property in England, Wales or Northern Ireland, they may pay the higher rates if they own property outside these areas"

AnotherJoe

That's horrendously woolly. ....... they "may" pay the higher rates? How can they write law like that? "We may hang you. Depends what we feel like on the day."

System

AnotherJoe wrote: »

That's horrendously woolly. ....... they "may" pay the higher rates? How can they write law like that? "We may hang you. Depends what we feel like on the day."

Because that is just the policy document, not the legislation itself

I.E. The decision on paying the higher rate had not yet been finalised when the policy document was piublished

AnotherJoe

Sorry !!!!!!, I understand thats the policy document but they should still have given more of a steer as to their intent, eg "are likely to" or "are unlikely to" or "are taking advice on the policy regards...".

You also have to wonder how this would work regards non UK nationals purchasing. How will they know what someone in say Russia or China has. If such people just say no and there's no way of proving it that puts them at a distinct advantage versus residents which is outrageous.

Or might govt simply decide anyone not a national / resident must have a property elsewhere?

All sorts of unintended consequences here.

always_sunny

it is very unclear!

Example 31:
S owns a property in Scotland, which she uses as a main residence. She is purchasing her first property in England, Wales or Northern Ireland, which she will use as a second home. At the end of the day of the transaction she owns two or more properties globally and is not replacing her main residence, so she will pay the higher rates of SDLT.

What is she buys in England to be her main residence and keeps Scotland as BTL?

When is this policy supposed to be expanded further to be usable? Seems so open to interpretation!
I would have thought the first give away would be the mortgage type?

Red_Spider

What if you own a property in England, then buy a second property outside the UK?

OP could sell their Spanish property, buy a British property, then buy a different Spanish property. A lot of hassle, but may be cheaper than paying the extra UK SDLT 3%.

Maybe one effect of these SDLT changes will be to increase the number of UK residents buying overseas property?

How would it be easier for HMRC to check if a British citizen owns an overseas property, as opposed to a foreign citizen owning an overseas property?

alchemist.1

The foreign property counting as the initial property will be open the payment of additional stamp duty to a lot of fraud.

Unsure how the authorities will keep tabs on that.

Red_Spider

alchemist.1 wrote: »

The foreign property counting as the initial property will be open the payment of additional stamp duty to a lot of fraud.

Unsure how the authorities will keep tabs on that.

Are you are saying that UK residents may not declare their overseas property to HMRC, to avoid additional SDLT rates?

True. But my understanding is that a UK taxpayer is already liable for income tax on rental income from overseas property.

So does HMRC have the ability to search every country's land registry, to see if a UK taxpayer's name pops up?

alchemist.1

Red_Spider wrote: »

Are you are saying that UK residents may not declare their overseas property to HMRC, to avoid additional SDLT rates?

True. But my understanding is that a UK taxpayer is already liable for income tax on rental income from overseas property.

So does HMRC have the ability to search every country's land registry, to see if a UK taxpayer's name pops up?

I would have thought most foreign property owned by the UK public would be holiday homes rather than renting them out on a formal basis. Will a time-share count?

Will be interesting to see how many people actually declare income from foreign homes or will declare it when they pay Stamp Duty

I imagine it would be hard enough for the revenue to keep up with the second properties in the UK nevermind abroad.

nobblyned

AnotherJoe wrote: »

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

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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.

Actually AnotherJoe, you are incorrect, if you read the official gov.uk link posted above with the flow diagrams and multiple examples you will see that the intention is that you do not pay the additional 3% if you are replacing your main home.