stamp duty when swtiching existing house to BTL

jimbob3

hi guys can anyone help with this question on the new Buy To Let stamp duty?

I have a house (A) in my own name and another rental property (B) owned by me and my brother, recently me and my wife were looking to move and our original plan was to switch our old house A onto a BTL mortgage when purchasing the new house (C) and rent it out as we want to be able to bid chain free and to make some extra money as we have enough deposit for both houses. With the new stamp duty I believe this is still an option but according to my sums the best plan would be to sell just before 3 years are up to make the most rental income but get the BTL stamp duty refunded?

- has anyone else tried this and is there anything I might not have thought of that makes this a bad idea?
- I’m pretty sure the stamp duty 3% applies to house C even though house A is the one being rented out on a BTL mortgage is that correct?
- would I be able to get the stamp duty refund if I sold my other rental house B within 3 years rather than house A?

thanks

Pixie5740

If you buy property C without selling A you'll pay the additional 3% SDLT because you aren't replacing your main residence you're keeping hold of the existing main residence and buying another. You have 36 months to sell property A to reclaim the additional SDLT paid. Selling property B won't allow you to reclaim the additional SDLT.

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

jimbob3

thanks Pixie, that's what I thought but just wanted to check. So has anyone else tried this or planning to do something similar, to me it seems doable although I'm guessing it won't be ideal trying to sell house A while renting it out when it gets close to the 3 year limit?

System

You have a good business plan as Buy-to-Let creates its own demand. Every property 'snapped up' turns a potential homeowner into a renter. I will hopefully be joining you in the ranks and getting some-one else to pay my mortgage debt.