New stamp duty question....

moneymark

Quick question...

I have a colleague who owns a buy to let and a residential property, both on mortgages.

He is keeping his buy to let, selling his current residential property and buying a new one.

Will the new stamp duty changes apply to him, I think they do but he seems to think not...

Senior_Paper_Monitor

EXAMPLE 10 (from current consultation document):

O is a buy-to-let investor with 10 residential properties in his portfolio. He also owns one residential property which he uses as his main residence. He decides to sell his previous main residence and purchase a new main residence.

At the end of the day of the transaction, he owns 11 properties – his new main residence and his 10 buy-to-let properties. However, as he has replaced his main residence he will not pay the higher rates of SDLT.


I hope you didn't bet anything !!!

brit1234

Yes he will have to pay the extra duty as he owns more than one property. The ledgislation is aimed at people hoarding property including those rent to buy people.

He won't have to pay if he buys before April and can get a rebate if he sells his rental.

Johnnytwostep

hope this now brings this question to a close
your answers are;
No, and
Yes

p00hsticks

brit1234 wrote: »

Yes he will have to pay the extra duty as he owns more than one property. The ledgislation is aimed at people hoarding property including those rent to buy people.

He won't have to pay if he buys before April and can get a rebate if he sells his rental.

Check out the flow chart in the Background Section 1.1 of the consultation document here
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

AS SPM says above, if a person is buying a property to replace their exisitng main residence (whcih they sell) then the current thinking is that they won't be liable for the higher SDLT even if they have other properties.

However, the inoput from the consultation paper is now being considered so this may change before the final legislation is put in place.

kingstreet

No addition to portfolio = no SDLT surcharge.

He currently owns two and when this completes he will still own two, provided the completions are concurrent.

Berger_3

So this is supposed to take effect from 1st April, but the exact legislation isn't clear yet? You would've thought it would work the other way round, impose a date once the exact legislation is finalised?

p00hsticks

Berger_3 wrote: »

So this is supposed to take effect from 1st April, but the exact legislation isn't clear yet? You would've thought it would work the other way round, impose a date once the exact legislation is finalised?

There's a pretty well defined timetable;

• The original proposal wwas announced in the Autumn Statement on 25th November last year
• They consultation paper was published on 28th December
• The consultation period closed on 1st February
• Responses submitted are now being considered
• The final policy will be confirmed in the Budget on 16th March
• The budget legislation will be passed before the start of the new tax year (6th April)

amnblog

As KS says, changing of main residence concurrently = no extra SDLT.

Purchase before sale = extra 3% SDLT, reclaimable if old property sold within 18 months of purchase of new one.

moneymark

OK, so how about if the main residence is not sold but remortgaged and made a let to buy, then a new main residence is purchased. Would that mean it was exempt from the hike?

Thrugelmir

moneymark wrote: »

OK, so how about if the main residence is not sold but remortgaged and made a let to buy, then a new main residence is purchased. Would that mean it was exempt from the hike?

As per post #5.

Check out the flow chart in the Background Section 1.1 of the consultation document here
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