Stamp duty deterrent for investors?

brit1234

VM1305 wrote: »

As if house buying and selling wasn't stressful enough already!!! Bloody George Osborne has a lot to answer for! Yes I agree it's not fair on people like us trying to do the right thing. If I wanted to keep on a second property as an investment then fair enough - I'll pay the tax.

I disagree, as a first time buyer this is one of the few good things George Osbourne has done. It use to be people would buy a property, out grow it and sell it to buy a bigger one. However over the last 10 years increasing numbers of people were keeping existing properties and buying another one. This reduced the supply of properties and pushed prices up.

The stamp duty change is very simple, if you have one property or more and buy another you pay extra stamp duty. If you go back to just owning one property you can claim the 3% back within 3 years of the additional purchase.

Phirefly

brit1234 wrote: »

The stamp duty change is very simple, if you have one property or more and buy another you pay extra stamp duty. If you go back to just owning one property you can claim the 3% back within 3 years of the additional purchase.

Actually it's not that simple. If you go back to owning one property you cannot claim the 3% back within 3 years if you were renting your home at the time you bought another to live in.

I'm not opposed to the principle of increased tax on btl. I am questioning the execution and the lacking attention to detail of this legislation that is negatively impacting the lives and choices of some of the very people it is seeking to help. Namely typical taxpaying people who have no desire to be landlords and are just trying to buy a home to live in for their family.

Freecall

Phirefly wrote: »

....and a really good idea to get it in writing too.

You already have it in writing, it's called the Finance (No. 2) Bill.


http://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0155/160155.pdf


Interpretation may well be an issue but ultimately getting a third party's view (whether in writing or not) will not change the writing that matters.

It may be heavy going but at the end of the day, all your answers are there.

.

VM1305

Phirefly wrote: »

I'm really glad that's confirmed, and a really good idea to get it in writing too. There's absolutely nothing anywhere that I've found that states that to be the case in your circumstances, in fact, quite the contrary which is massively unhelpful for others who might find themselves in your shoes. Great news that you can claim a refund!!

Sorry to have harped on but his has very much been my life for the past couple of months and if I can help just one person avoid the stress we've had it'll be worth it.

Luckily we sold our house for its full valuation price 3 days after it went on the market so everything is crossed for speedy conveyancing!

No need to apologise - your comments are really helpful. Well done on working through it all and selling your house quickly and for the price you wanted - great news!

Despite HMRC telling me directly that I will be able to claim back the extra stamp duty in the future, I won't fully rest until it actually happens (or if I can indeed sell my rented house in the future!) The conflicting information is very irritating, I did all these checks before I started my search and had an offer accepted on a property. If I had been told differently we would have waited until we could have sold my other house before buying again (not ideal for our personal circumstances and desire to move, but financially it would have influenced our decision).

I will see what I receive in the post from HMRC and what my solicitors are willing to confirm in writing to me!

Hope your house sale progresses well

Hoploz

The 3% doesn't bother me. Property is so expensive in the south east that tbh the extra is a drop in the ocean, I'd just factor it in when deciding my budget.

VM1305

Phirefly wrote: »

Actually it's not that simple. If you go back to owning one property you cannot claim the 3% back within 3 years if you were renting your home at the time you bought another to live in.

I'm not opposed to the principle of increased tax on btl. I am questioning the execution and the lacking attention to detail of this legislation that is negatively impacting the lives and choices of some of the very people it is seeking to help. Namely typical taxpaying people who have no desire to be landlords and are just trying to buy a home to live in for their family.

Exactly, I agree completely wtih Phirefly.

I am also not opposed to the principle of people paying additional tax on a second home, as I said in my first post on this thread. I think those with the benefit of additional homes used as investments should pay the extra tax. But the lack of detail and inconsistent advice being given by HMRC is not helping people make informed decisions.

I do not want to pay the additional tax which is why I am planning to sell my second home and potentially free up more supply which would benefit first time buyers. Only now it appears this makes no difference because in my circumstance, I have to pay the additional tax whether or not I keep my second home.

I am not a fan of George Osborne and I'm delighted he has been sacked :T

sheramber

It appears if the rented out house was your main residence at any time during the period of three years before the purchse of of the new main residence the you can claim the duty back.
For the purposes of sub-paragraph (5) the purchased dwelling may
become a replacement for the purchaser’s only or main residence
if—
(a) on the effective date of the transaction (“the transaction
concerned”) the purchaser intended the purchased dwelling
to be the purchaser’s only or main residence,
(b) in another land transaction whose effective date is during the
period of three years beginning with the day after the
effective date of the transaction concerned, the purchaser or
the purchaser’s spouse or civil partner disposes of a major
interest in another dwelling (“the sold dwelling”), and
(c) at any time during the period of three years ending with the
effective date of the transaction concerned the sold dwelling
was the purchaser’s only or main residence.

Only married couples and those in a civl partnership are considered a linked couple So if a couple are partners but not in a civil partnership and one partner owns a let property in his/her own name and the other partner buys the main residence in his/her own name then the additional stamp duty is not payable.

Phirefly

Freecall wrote: »

You already have it in writing, it's called the Finance (No. 2) Bill.


http://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0155/160155.pdf
.

I'm struggling (after a long day of toddler wrangling) to locate within the section on Higher Rates Transactions the precise detail pertaining to VM1305's and my individual circumstances....

Phirefly

sheramber wrote: »

It appears if the rented out house was your main residence at any time during the period of three years before the purchase of of the new main residence the you can claim the duty back

Thats the rub for us, it was our main residence over 3 years ago.

sheramber wrote: »

Only married couples and those in a civl partnership are considered a linked couple So if a couple are partners but not in a civil partnership and one partner owns a let property in his/her own name and the other partner buys the main residence in his/her own name then the additional stamp duty is not payable.

I knew I should never have married him

VM1305

Hello

Further to my previous posts on higher rate SDLT for second home and eligibility for a refund if disposing of this home, we all agreed that the guidance on the HMRC website is VERY confusing! I also didn't find my own conveyancing solicitors particularly helpful on this tax query and so I decided to only deal with HMRC directly (always a fun experience!) I received guidance from their advisors over the telephone but requested they respond to my specific queries in writing, I received a letter from HMRC this morning so wanted to share...may be of some use to others with the same query.

My circs:
Bought a property as single person in 2006 (property A) and lived in this property as main residence until 2014 when I got married and moved into rented accommodation with my husband. Kept property A and rented it out, under my name only.
Husband has no other property in his name.
This summer we started purchase of a new main residence (property which will be in our joint names as a married couple.
The new tax rules mean that our SDLT bill was £10k higher and so I was keen to sell property A when my current tenants move out and claim a refund from HMRC. However, it was unclear whether I would be eligible for this refund.

HMRC have confirmed that:
1/ As I still own property A we are liable for the higher rate of SDLT for an additional dwelling (no surprise)
2/ If I dispose of property A within 3 years of purchasing property B I will be able to claim a refund of the additional SDLT. However (and this was the point of confusion), this is only claimable providing I lived in property A in the three years prior to purchasing the new main residence.

Thanks for the advice from sheramber & phirefly - it was more helpful than what I was told by my solicitors, and helped me ask the right questions with HMRC.

Now I just have to sell property A, but in theory a refund is possible