Stamp Duty and Second Homes

silvercar

One way round it would be to buy the cheapest property you can find in the UK. Go live in it for a short time. Sell it at the same time as you buy your new home. That way you won't be increasing the number of properties you own and will be selling your current home to buy another.

AnotherJoe

nobblyned wrote: »

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.

I did say second or subsequent. It would have been clearer had I said "additional".

Seems my post was as clear as the governments outline is

AnotherJoe

Red_Spider wrote: »

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%.

Good point, shows the illogicality of the regs as they've currently set them out. If the numbers worked out they could even sell the overseas property to a trusted third party, then buy in UK, then buy back from third party.

Red_Spider wrote: »

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?

Because they'll have access to the biritish citizens bank records

silvercar

AnotherJoe wrote: »

Because they'll have access to the biritish citizens bank records

Which would show money going overseas to a foreign solicitor. It wouldn't specify what the money was used to buy. In fact it could still be being held by the foreign solicitor ready to purchase a property, a boat, a luxury cruise, a charitable donation......

AnotherJoe

silvercar wrote: »

Which would show money going overseas to a foreign solicitor. It wouldn't specify what the money was used to buy. In fact it could still be being held by the foreign solicitor ready to purchase a property, a boat, a luxury cruise, a charitable donation......

Of course. But it would give them an incentive to check if for example the were regular payments coming in. Or if the person already declared their income from a foreign letting.. Whereas with a foreign citizen, there's nothing to raise a suspicion. No income visible, no bank records to check. Take the simple case of Senor Cruz vs Mr Smith. Both own a holiday rental in a Costa. Both buy a property in Clacton. Who do you think the tax authorities will check up on when both declare they don't own any other property??

Don't misunderstand me, I'm not saying it gives it away or it's a doddle , I'm merely saying it would be far easier to have suspicions, and then to investigate a British citizen than a foreign one. And as we all the know the tax authorities do what's easiest.

martindow

Red_Spider wrote: »

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%.

I imagine the costs of selling and buying in Spain are going to be far greater than the 3% extra SDLT unless the UK house is hugely more expensive.

nobblyned

AnotherJoe wrote: »

I did say second or subsequent. It would have been clearer had I said "additional".

Seems my post was as clear as the governments outline is

The fact remains that you can have 2,3, 4 or any number of houses, but if you are buying another house that will replace your main residence you do not pay the additional 3%.

Red_Spider

Good points about the bank accounts.
I was considering it from an ownership, rather than a purchase and income perspective.

Mr Smith could have a Spanish bank account and Senor Cruz a British bank account.

Also, for a land registry search, HMRC could make an educated guess to start with Spain for Senor Cruz, but with Mr Smith, which land registers would they start with?

Someone previously told me that any bank transaction over a certain amount is automatically reported to HMRC or some other government agency. Something to do with money laundering or tax evasion...

Out of interest, do any other countries increase their SDLT equivalent, if the buyer owns property elsewhere?

duggan1

nobblyned wrote: »

The fact remains that you can have 2,3, 4 or any number of houses, but if you are buying another house that will replace your main residence you do not pay the additional 3%.

Only if your main residence is being sold.

always_sunny

Red_Spider wrote: »

Out of interest, do any other countries increase their SDLT equivalent, if the buyer owns property elsewhere?

Might be quicker to list which countries have SDLT like the UK... most countries would have property tax (fair enough) to register the purchase. Other countries would also have additional taxes like Council Tax (fair enough)... but SDLT is a tax on top of a tax!