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Managing the extra 3% stamp duty
Comments
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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?
The rule does apply, however, the SDLT is a cost of purchasing so will be deductible in relation to any CGT payable.0 -
It applies to a sale at anytime.
The stamp duty is a cost that can be used to offset any gain, as well as legal fee's when buying the property and the actual purchase price.0 -
not necessarily the best way you could have worded your answer...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.
the basis of the refund is that the old main residence is being replaced with a new main residence. The new property must therefore be occupied as the new main residence.
The rule is that the old property (what I think you mean by "second home") must, at sometime within the previous 3 years have been used at the previous main residence. Patently that means it does not have to have been in continuous use as the main residence and so yes it can be let for a period after moving out, but it must be sold within 3 years in order to claim the refund. It is therefore best not to call it a second home since, if let, it is no longer a "second home".
most scenarios were fairly predictable and the FAQ section of the guide deals directly with the issues above ... have a read of the (now updated) guide?
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf0 -
the SDLT is a cost of purchasing so will be deductible in relation to any CGT payable.
A minimal offset since that would only recover a maximum of 28% of the SDLT bill under certain circumstances. Since we are talking about main residences and former main residences the chance that significant CGT would allow a 28% reclaim are extremely small.0
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