Help! Stamp duty 2nd home surcharge

okenny123

Evening all,

I've put in an offer on a property and expect it to be accepted. I have the deposit and mortgage in principle, so all is well there.


However, I currently own a property that I'm yet to put on the market, and it has only just occured that I will be subject the the 3% surcharge, which will mean stamp duty jumps from £300 up to £4,500!


I've got every intention of selling my first property, but realistically it isn't likely to happen before completion on the one I'm looking to buy and move to. If my offer is accepted on the first property, is there any kind of grace period that allows me to sell my current property so as to avoid the 3% surcharge? As you would expect, I can't put a timescale on selling my current property, but will be looking to get it on the market asap.


Everything is falling into place, but with almost all of my money going on the deposit and costs associated with buying and moving, I simply can't afford to pay £4,300 more than I expected on stamp duty.


Any advice very much appreciated!

Bluebirdman_of_Alcathays

You can get the extra SDLT refunded if you sell your first house within 36 months. There is no grace period in the way you describe though.

Why not just make the purchase contingent on the sale of your old property? Ie go in a chain. Thousands of houses are sold each week like that. If your house is priced appropriately it'll sell quick enough.

marksoton

You've done things the wrong way round. Sell the current property before purchasing the new one. Or concurrently as above.

okenny123

Thank you both. I appreciate I havn't done things in the traditional order, but in truth the viewing was spur of the moment because it looked like a very good buy, and after viewing it twice it really does tick all of the boxes while other properties within my budget haven't.

agrinnall

I'm not sure what help you are hoping for, if you're not prepared to sell your other property first then your only options are to find the extra £4,300 from somewhere (even if it's on a temporary basis) or pull out of the purchase altogether.

okenny123

Thanks Bluebirdman for the very useful advice. Would it just be a case of explaining my situation to HMRC to ensure that they are aware of my circumstances?
Again, any advice very much appreciated.

marksoton

okenny123 wrote: »

Thanks Bluebirdman for the very useful advice. Would it just be a case of explaining my situation to HMRC to ensure that they are aware of my circumstances?
Again, any advice very much appreciated.

You can explain away but they'll still expect the payment of the additional 3%.

You need to get rid of the initial property first to avoid payment.

okenny123

I fully intend to sell my current property assuming my offer is accepted. I have no intention of keeping it as a buy to let, or profiting from owning a second home in any way. What I do want however is a grace period to sell my current property. If I have to find £4,000+ to pay the surcharge then I'll find a way (I would hope that gives you some idea of how set I am on the property I'm hoping to buy) but I would hope that HMRC will refund the surcharge if I sell my property within a short timeframe seeing as owning two homes is the result of bad timing/planning rather than a way of making money. I hope you can understand my reasoning!

Bluebirdman_of_Alcathays

They will refund it, that is black and white law. You don't need to explain anything, just submit appropriate paperwork.

PasturesNew

You have to pay it; you can reclaim it once house 1 has been sold.

No "talking to them". There's only one way to do it. Your "situation" is the same as hundreds of other people.

Buy/pay, sell/reclaim.

marksoton

okenny123 wrote: »

I fully intend to sell my current property assuming my offer is accepted. I have no intention of keeping it as a buy to let, or profiting from owning a second home in any way. What I do want however is a grace period to sell my current property. If I have to find £4,000+ to pay the surcharge then I'll find a way (I would hope that gives you some idea of how set I am on the property I'm hoping to buy) but I would hope that HMRC will refund the surcharge if I sell my property within a short timeframe seeing as owning two homes is the result of bad timing/planning rather than a way of making money. I hope you can understand my reasoning!

They will refund it. What they won't do is give a grace period.

You need that cash upfront or to sell the first property prior to the second purchase.