Managing the extra 3% stamp duty

BeatTheSystem

Hi,

My wife and I have put an offer in for a property which has been accepted.

We currently jointly own our present family home which is mortgage free.

We have enough cash to buy the new property without having to first sell our own which requires some refurbishment before we feel that we could market it and get a reasonable price for it.

I understand that there is an additional 3% stamp duty levied on 2nd properties which would have to be paid but we would be able to recoup the 3% so long as we sell the first property within 2 years.

However is the following possible?

1. place the existing property solely in my wife's name
2. purchase the new property in my name (changing it later jointly if it matters)

Would this avoid us having to pay the additional 3%?

Thank you in advance

BTS

Slithery

No.

A married couple are treated as one unit for SDLT purposes. You would be going from owning one property to owning two so the extra SDLT would still be due (although you do get 3 years to reclaim it).

BeatTheSystem

Slithery wrote: »

No.

A married couple are treated as one unit for SDLT purposes. You would be going from owning one property to owning two so the extra SDLT would still be due (although you do get 3 years to reclaim it).

Thanks 3 years gives more time if needed although I would want to shift it much quicker.

Its just cash flow at the end of the day but it could be quite tight.

If the house was placed in my wife's name as BTL would that make a difference?

cashbackproblems

BeatTheSystem wrote: »

Thanks 3 years gives more time if needed although I would want to shift it much quicker.

Its just cash flow at the end of the day but it could be quite tight.

If the house was placed in my wife's name as BTL would that make a difference?

NO! what part of second home do you not understand. Its not a tax on a 3rd property

AdrianC

BeatTheSystem wrote: »

If the house was placed in my wife's name as BTL would that make a difference?

You own one house now - your main residence.
You will own two houses soon. You will have to pay the +3% SDLT.
When you sell your original house within 3yrs, and the new one is your main residence, then you can reclaim that +3% SDLT.

YOU means YOU (married couple), because a married couple are treated as one unit for the purposes of this. It doesn't matter whether one house or both houses are in single names or joint names.

Whether you let it or live in it is irrelevant, so long as you start off living in one and finish living in the other within three years, as is how you fund it - cash or mortgage.

sparky130a

BeatTheSystem wrote: »

Thanks 3 years gives more time if needed although I would want to shift it much quicker.

Its just cash flow at the end of the day but it could be quite tight.

If the house was placed in my wife's name as BTL would that make a difference?

Well it's cashflow you're going to need to manage because you will be paying the additional 3%.

Mickygg

So if Cashflow is tight for OP who will have to pay the 3%, does anyone know how long it will take when selling the property to actually receive the 3% back into their account? I should imagine it could take a while but I don't know, and this could be a big deal for you OP?

davidmcn

Mickygg wrote: »

So if Cashflow is tight for OP who will have to pay the 3%, does anyone know how long it will take when selling the property to actually receive the 3% back into their account? I should imagine it could take a while but I don't know, and this could be a big deal for you OP?

Just as long as it takes HMRC to process it after the sale completes - if this makes a difference then the OP really does have trouble.

Leeds2626

Rather than start a new thread...

Can you claim the 3% SDLT back if

You buy a second property. Rent out it for 24/30 months and then sell your previous main house within the 3rd year of owning the new property?

da_rule

Leeds2626 wrote: »

Rather than start a new thread...

Can you claim the 3% SDLT back if

You buy a second property. Rent out it for 24/30 months and then sell your previous main house within the 3rd year of owning the new property?

Yes, it does not seem to state in the rules what the second home must be used for in the interim period. However, HMRC must receive the request for repayment within 3 months of the sale of the previous main residence or within 12 months of the filing date of the return, whichever comes later.

economic

does the 3 year rule apply if you sell the second property you bought within 3 years of buying it? or does the rule only apply to the primary residence being sold within 3 years?