application of Stamp Duty Surcharge

loofer

Doesn't seem very clear on the .GOV site so hoping somebody can direct to somehwre that can clarify (my opinion differs from my solicitor).

Most will know that from 1st April there was a 3% surcharge introduced for holders of more than one residential property.

My situation:
I own a BTL property that I have let out. I bought it when I was young and own it outright. I've only ever lived with my parents or more recently renting a house myself.

I am now purchasing a house to live in for myself. I will not be selling the BTL property. So at the end of the day I will own 2 houses.

I am not adding to my BTL portfolio and I am actually replacing my main residence (which I am currently renting as a tenant).

The flow chart on the .GOV websites says you don't pay the surcharge if "you are replacing your main residence (which is being sold)".

It's the bit in brackets which get's me. I am replacing my main residence, but it's not mine to sell as I'm currently renting my main residence.

My solicitor reckons I have to pay the the surcharge as end of the day I will own more than one property. It's costing me an additional £5100 in SDLT. Something I could do without.

The way I see it, somebody who has a 10 house portfolio will pay the same SDLT as me if they bought the house as another BTL whereas I'm buying it for my main residence and giving up a house back on rental market.

Hope that makes sense and somebody can clarify an authoritative source.

agrinnall

Of course you have to pay the surcharge, you will own two properties. If you don't want to pay it, sell the BTL first.

mjdh1957

Your solicitor is right.

The key facts are that you will end up owning two properties, and are not selling a 'main residence' and buying another.

davidmcn

loofer wrote: »

Doesn't seem very clear on the .GOV site

The flow chart on the .GOV websites says you don't pay the surcharge if "you are replacing your main residence (which is being sold)".

What's unclear about that? You're not selling your main residence, so the exemption doesn't apply to you.

Bluebirdman_of_Alcathays

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf


Section 8 - Q and A


Q2 is exactly your scenario, and yes you have to pay.

loofer

Bluebirdman_of_Alcathays wrote: »

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf


Section 8 - Q and A


Q2 is exactly your scenario, and yes you have to pay.

Thanks, that clarifies and confirms it for me.

loofer

davidmcn wrote: »

What's unclear about that? You're not selling your main residence, so the exemption doesn't apply to you.

I am replacing my main residence, it was the bit in brackets and the fact that it was in brackets that lead me to question it. All clear now

agrinnall

loofer wrote: »

I am replacing my main residence, it was the bit in brackets and the fact that it was in brackets that lead me to question it. All clear now

But you never were replacing your main residence, SDLT is all about ownership and you don't own the place where you currently live, so there was no question of replacement. It's a complete red herring.