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Possible to buy a lease?
Jane_Porter_2
Posts: 2 Newbie
Hi, I live in a terraced house divided into three flats.
I own two of the flats and the freehold of the building.
I want to buy the third flat from the leasehold owner (66years left on the lease), and wondered if I could just buy the lease and thus avoid second home stamp duty, because the whole building would be in my name and become my home as a whole, not a second home. Perhaps this is just wishful thinking. Can anyone advise me?
Jane
I own two of the flats and the freehold of the building.
I want to buy the third flat from the leasehold owner (66years left on the lease), and wondered if I could just buy the lease and thus avoid second home stamp duty, because the whole building would be in my name and become my home as a whole, not a second home. Perhaps this is just wishful thinking. Can anyone advise me?
Jane 0
Comments
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You can certainly buy the lease, if the leaseholder will sell it. I don't think the transaction will incur the second home rate of SDLT because at the end of the transaction you will still own just one property. You might have to merge the lease and the freehold as part of the transaction to achieve this.
A conveyencer would be able to confirm this.The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0 -
Does the leaseholder intend to sell?!0
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By buying that third flat, you are buying "just the lease", in the same way as any Joe Average buys "just the lease" for any other leasehold property.
You will then own three leasehold flats, plus a freehold. So, yes, you will be going from two leasehold plus freehold to three leasehold.
You MIGHT be able to argue that, by cancelling the leases, you are then owning just one freehold property - I suspect the usual three year pay-the-SDLT-claim-back would apply. I suspect you'd need to have done sufficient work to be able to consolidate the council tax into a single dwelling, with whatever planning and building regs permissions and sign-offs are required. You certainly wouldn't qualify if you just kept the three flats as three separate properties.0 -
I know it's not what you're asking - but combining flats typically results in loss of value. (The resulting house would probably be worth less than the sum of the 3 flats.)
That's why developers make money by buying houses and converting them into flats.
But I guess you could convert the house back into flats before you sell (but building regs may have got much tougher since the original conversion).0 -
I think as far as SDLT is concerned, it would be treated as a purchase of an additional dwelling. What you convert it into afterwards is irrelevant.0
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Thanx everyone for the respose to my question. Very helpful. 0
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