Stamp Duty on main residence

Dunmore

Hi. The new stamp duty rules have got me a little confused to say the least.

My situation is that my wife and I bought a property in 2006 as our main residence and let out my flat.

We sold that residence in 2008 and have been living in rented accomadation ever since. We still have the let flat

I beleive that if we buy a main residence within 3 years of when the new rules came in we will not be liable for the higher stamp duty.

Am I correct?

Thanks

Darren

kinger101

That is incorrect. The higher rates will apply.

Alter_ego

Dunmore wrote: »

Am I correct?

I don't think so, you are still property owners-the flat

AdrianC

Not quite. If you buy a new main residence, and still own another property, then you pay the 3% hike. BUT if you sell your existing main residence within three years of that purchase (or the two are tied together in a chain), then you can reclaim the 3% premium.

So, since you aren't selling your existing main residence, then you pay the 3%.

You're going into the purchase owning one property, you're coming out of it owning two.

From .gov.uk

https://www.gov.uk/government/consultations/consultation-on-higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties/higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties

booksurr

you are categorically liable for the higher rate SDLT. There are transitional rules, but they do not apply to your scenario

- you have not (nor intend to) lived in the flat as the marital home within a 3 year period of the date you purchase the new marital home - see chapter 8 Q&A :
"I currently live in rented accommodation but own a property that is rented out. I am now looking to purchase my first home, for me and my family to live in. Will I have to pay the higher rates of SDLT on this purchase?
A2. Yes, the higher rates of SDLT will apply as following the purchase you will own an additional residential property (and will not have replaced your main residence, i.e. sold a current main residence and purchased a new one)."

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

Dunmore

Thanks for everyone's answers

What I still don't understand is I am replacing my main residence having disposed of my previous one 8 years ago

Can someone please explain what this rule is trying to do as I know if I owned my main residence I would not be liable. So whats the difference?

Thanks

Alter_ego

Dunmore wrote: »

Can someone please explain what this rule is trying to do

It is raising money by taxation of folks with 2 properties, when they change property.
It's not trying, it actually works.

Dunmore

Alter_ego wrote: »

It is raising money by taxation of folks with 2 properties, when they change property.
It's not trying, it actually works.

Yes of course but why are they not raising taxes from people who currently own their own residence and sell to buy another still leaving them with 2 properties. It is this subtlety I want to try and understand.

Thanks

AnotherJoe

Because they aren't buying an additional property. You are.

AdrianC

Dunmore wrote: »

What I still don't understand is I am replacing my main residence having disposed of my previous one 8 years ago

No, your main residence is currently a rented property. You haven't lived in a property you've owned for the thick end of a decade.

Can someone please explain what this rule is trying to do as I know if I owned my main residence I would not be liable. So whats the difference?

The difference is that you currently own one property, and will own two properties at the end of this transaction.

Dunmore

AnotherJoe wrote: »

Because they aren't buying an additional property. You are.

Ok I understand, but doesn't the fact that it will be my main residence count? I am just replacing the main residence i sold 8 years ago.

The flow chart above is vague in that it says "being sold". If that categorically means not sold already then I get it but I don't think this is what it means. I think this means that the property must be sold so you only remain with a main residence.

Thanks