Additional Stamp Duty

Aj12345_3

Hi all,

I was hoping to get some clarification from you on the 3% additional home stamp duty.

Currently, I have a residential mortgage with my sister but, due to recent circumstances I have moved out and live with parents. I am in the process of changing the residential mortgage to a buy to let with HSBC. I hope they will provide consent to let shortly - this should not be an issue.

I am also in purchase of purchasing another main residential property in my name and my stamp duty. Before this is completed my consent to let will be granted on the other property. Will I be eligible for the additional stamp duty or will I just pay the normal rate??

The extra 3% is an additional 10k so throws my financial services completely. Hope you can clarify for me.

Thank you

James_Tyroll

Additional stamp duty applies for anyone who already has a residential property, whether you're living in it or renting it out - the only exception is if you are in the process of selling the existing house and the new one will be your main residence.

As you're not selling the existing house, you'll need to pay the extra SD.

You can claim the additional SD back if you sell the other house within 3 years

booksurr

yes you must pay the higher rate as you are not selling your current main residence. You fail on the first condition, failure to dispose....

3.17 There are two parts to a replacement of a purchaser’s main residence:

 there must be a disposal of the purchaser’s or their spouse or civil partner’s previous main residence, and

 the dwelling acquired must be intended to be occupied as the individual’s only or main residence

however, as noted, since it was once your main home if you do sell it within 3 years you can get a full refund of the extra tax you must now pay.

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

david171

Unfortunately, you will have to pay the higher rate but can claim a refund if you sell your old min residence within three years.

Don't worry if you let it out before you complete on our new purchase, as replacement of main residence counts as long as you lived within the property in the 3 years prior to completing on the new house. So if you complete your new purchase on the 01/07/16, as long as the property was your only and main residence at any time between 01/07/13 - 01/07/16 - (no minimum duration required) - you will be eligible for a refund - as long as you sell between 01/07/16 - 01/07/19 after having completed on your new house.

bravotango

Yep, additional SD must be paid as this an additional residence, and not your main primary residence.