Help! Stamp duty 2nd home surcharge

okenny123

Thanks all for taking the time to post - I joined for some clarification on what someone in my situation could expect, and to have a definitive answer is a massive help. Your advice is very much appreciated.

slowpoke_rodriguez

Bluebirdman_of_Alcathays wrote: »

You can get the extra SDLT refunded if you sell your first house within 36 months.

3 years? Blimey!

booksurr

slowpoke_rodriguez wrote: »

3 years? Blimey!

strange comment? Do try to keep up!

the govt consulted extensively on the SDLT proposals and the feedback was that selling a property within 18 months was not a practical proposition.
https://www.gov.uk/government/consultations/consultation-on-higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties

The Govt therefore amended its ideas and the legislation was enacted with a 36 month period in which to sell and claim the refund and published the guidance note so you can all know what to do
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf

wolfplayer

So sad. Too bad.

wolfplayer

The rules have been changed to crack down on home hoggers.

SDLT surcharge.

Really though. Wants to buy another home, but can't even scrape together enough for the higher SDLT surcharge? Insanity imo.

There was a time when to move, you sold your home, before buying new home. That's what we're going back to, but some people think they are too special for the new rules to apply to them and their 'individual' circumstances.

sidewinderflame

I'm in a similar situation and I had been wondering about this but am still confused. My home is on the market and under offer stage but will complete after my purchase which is fine but I assumed that the stamp duty would be the normal rate but having read the above it looks like I would have to pay the higer rate and claim it back. However I went to the governement stamp duty calculator site and filled out the details, said it was going to be a second home for a period of time but my main residence and it told me that I was due to pay the lower rate of Stamp Duty so is this definite that you would have to pay up front and claim it back? I guess up till now this hasn't really been a problem as all rates have been the same.

gingercordial

sidewinderflame wrote: »

I'm in a similar situation and I had been wondering about this but am still confused. My home is on the market and under offer stage but will complete after my purchase which is fine but I assumed that the stamp duty would be the normal rate but having read the above it looks like I would have to pay the higer rate and claim it back. However I went to the governement stamp duty calculator site and filled out the details, said it was going to be a second home for a period of time but my main residence and it told me that I was due to pay the lower rate of Stamp Duty so is this definite that you would have to pay up front and claim it back? I guess up till now this hasn't really been a problem as all rates have been the same.

Are you using the calculator at https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/

I just did a dummy calculation, and it asks:

Will the purchase of the property result in owning two or more properties? -> Answer Yes

Is the property being purchased replacing your main residence?
If your previous main residence has not yet been sold choose "No". A refund may be available if the previous main residence is sold within 3 years. -> Answer No as it tells you to do (my bolding)

And then it gives a result including the additional tax but with a note that a refund may be due if the previous main residence is sold within three years. This is in line with what everyone is saying above. Did you answer those questions correctly?

sidewinderflame

Thanks v much ginergcordial for your reply. I actually answered the main residence question differently as the place I am buying will be my main residence which I will move into straight away. Basically my sale is taking longer than expected due to the other party and the purchase has gone really quickly which is leading to my purchase completing first but I totally understand the point you're making.

It seems that there could be lots of situations where this could come up and the government should really maybe give a grace period before demanding the extra 3%. I guess selling within three years covers those that weren't planning on selling but then do so in time rather than those where the timings have gone out. Hmmm now I have to find an extra several grand, that's going to be tough

Incidentally I found this on another site which may be useful to some people :

What if I am replacing my main residence?
If the home you are buying directly replaces your main residence, you will NOT have to pay the 3% surcharge, even if you own an additional home/s at the same time. This example is straight from the Government's consultation document:

"A owns both a main residence and a second home. She sells her main residence and purchases a new one. Although she has two properties at the end of the day of the transaction, she has replaced her main residence so the higher rates will not apply."

booksurr

sidewinderflame wrote: »

Incidentally I found this on another site which may be useful to some people

what will be MOST USEFUL to other people is to read the flipping instructions! This is not rocket science. If you do not complete the sale of the sold house and purchase of the new house on the same day then you are an owner of 2 properties and are liable to the higher rate. If the old house was your main residence and the new house is your new main residence then , and only then, can you claim the refund having paid the extra tax upfront.

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

mije1983

sidewinderflame wrote: »

I actually answered the main residence question differently as the place I am buying will be my main residence which I will move into straight away. Basically my sale is taking longer than expected due to the other party and the purchase has gone really quickly which is leading to my purchase completing first but I totally understand the point you're making.

It seems that there could be lots of situations where this could come up and the government should really maybe give a grace period before demanding the extra 3%. I guess selling within three years covers those that weren't planning on selling but then do so in time rather than those where the timings have gone out. Hmmm now I have to find an extra several grand, that's going to be tough

This part of your own post is different to your situation:

"A owns both a main residence and a second home. She sells her main residence and purchases a new one. Although she has two properties at the end of the day of the transaction, she has replaced her main residence so the higher rates will not apply."

When you complete on your new property, you will not have sold your first one. So at day zero you will have 2 properties. Can you not dealy your purchase to coincide with your sale to negate the need for the additional SD?