Second property SDLT

Alec_85

I was unaware until December. I was in ignorant bliss.

And yes, I'm most definitely not in London. But I have the money because I saved up for it, and this was an attempt to plan for the future noting my pension apparently isn't going to be enough if you listen to what the government says.

Also, aren't companies who make a living from buying and letting exempt from the sdlt? Seems to me that they're picking on the little guys when there are bigger fish to fry...

Anyway, am I right in saying that if I decide to sell one of the properties with a certain time frame I'd get the sdlt back?

Pixie5740

Yes if you sell one of the properties within 18 months you can claim back the additional SDLT.



That said, do the sums. See if the BTL is worth it in the long run even with the additional 3% SDLT. Also compare your rental yield with other types of investments which might give better returns and be more tax efficient.

_CC_

Given that you were unaware of this tax (which was widely reported on), are you sure you're aware of all the other tax implications of using a BTL/LTB as your pension nest egg and how it (unfavourably) compares to other pension options?

HappyMJ

Alec_85 wrote: »

I was unaware until December. I was in ignorant bliss.

And yes, I'm most definitely not in London. But I have the money because I saved up for it, and this was an attempt to plan for the future noting my pension apparently isn't going to be enough if you listen to what the government says.

Also, aren't companies who make a living from buying and letting exempt from the sdlt? Seems to me that they're picking on the little guys when there are bigger fish to fry...

Anyway, am I right in saying that if I decide to sell one of the properties with a certain time frame I'd get the sdlt back?

Did you know there isn't that much money in property?

I am as well as many others on here am a landlord. The house I own barely makes £30 per month profit from £600 of rent over and above all of the expenses associated with it and it is a risky investment. If there is a void I get zero income for a period of time which if the void goes on too long can easily wipe out the profit I've made in the past. When rented out I get a 5% gross return before expenses. It's not the best investment you can make for your pension where you require a regular monthly income. I make more money putting my savings into regular saver accounts earning 6% and high interest current accounts earning no less than 3% and it's so much easier than the work involved in managing a property.

If you're earning money you could contribute to a pension and save on tax effectively getting 25% more invested than had you used after tax income to invest in a BTL.

giddypenguin

Alec_85 wrote: »

And yes, I'm most definitely not in London. But I have the money because I saved up for it, and this was an attempt to plan for the future noting my pension apparently isn't going to be enough if you listen to what the government says.

The government can't advise you on your personal pension, and I can't see your documents from here. Is it enough for you to live on?

Again, property isn't the only investment you can make - there are many others, each with different tax implications, some are probably less risky (what if property prices fall, a tenant trashes the place, doesn't pay rent, breaks the boiler etc) , and many are less work (you don't just sit back and collect rent - you do have to work for the money, maintainance, certificates, tax returns, etc)

Why are you so intent on property?

[Deleted User]

Alec_85 wrote: »

I thought so. Bit of an !!!! as this flat was supposed to be my nest egg in years to come. I'm not planning to become a property mogul, this kind of charge seems pretty unfair to me! Oh well!

You have a very warped view of what is fair and unfair in life

TBagpuss

Alec_85 wrote: »

I was unaware until December. I was in ignorant bliss.

And yes, I'm most definitely not in London. But I have the money because I saved up for it, and this was an attempt to plan for the future noting my pension apparently isn't going to be enough if you listen to what the government says.

Also, aren't companies who make a living from buying and letting exempt from the sdlt? Seems to me that they're picking on the little guys when there are bigger fish to fry...

Anyway, am I right in saying that if I decide to sell one of the properties with a certain time frame I'd get the sdlt back?

You could invest in a property investment fund where you would be buying shares in a property investment company, rather than becoming a direct landlord - this could also allow you to spread the risk a little as you would nlot be investing in a single property so damage or void periods would have less on an impact.

Or you could invest in a range of other types of investment, wither iniside your pension or elsewhere.

Lila2708

Hi OP, we are in a similar boat I suppose. I have just posted about this. Our first property sunk into negative equity (down by 17k) and the only way we can move is by renting our existing property and staying in my parents to save for a deposit so we can have a home in an area we want close to our friends and family. As its been a recent decision we were also unaware of the stamp duty increases and found out today that its actually going to cost us £7,500.
We haven't set out to deprive anyone of owing a home, its not for investment purposes or for a nest egg and we don't want to own other properties. We just want a nice house for our family and now because of this new rule we will be crippled financially if we do and yes it does feel bloody unfair.
But apparently some people this we deserve it

Pixie5740

Lila2708 wrote: »

We haven't set out to deprive anyone of owing a home, its not for investment purposes or for a nest egg and we don't want to own other properties. We just want a nice house for our family and now because of this new rule we will be crippled financially if we do and yes it does feel bloody unfair.
But apparently some people this we deserve it

You have choices as outlined in your own thread.

1) Continue living in the house and overpay your mortgage, selling it at a later date.

2) Price it to sell. Any property will sell if priced correctly.

3) Let the property out and rent another home for you and your family.

4) Let the property out whilst living with your parents saving as much as you can.

Plenty of options to avoid paying the extra £6k in SDLT.

Bluebirdman_of_Alcathays

Lila2708 wrote: »

Hi OP, we are in a similar boat I suppose. I have just posted about this. Our first property sunk into negative equity (down by 17k) and the only way we can move is by renting our existing property and staying in my parents to save for a deposit so we can have a home in an area we want close to our friends and family. As its been a recent decision we were also unaware of the stamp duty increases and found out today that its actually going to cost us £7,500.
We haven't set out to deprive anyone of owing a home, its not for investment purposes or for a nest egg and we don't want to own other properties. We just want a nice house for our family and now because of this new rule we will be crippled financially if we do and yes it does feel bloody unfair.
But apparently some people this we deserve it

Being in negative equity doesn't mean you need to buy a second house!! What planet are you on?!