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Buying second home as main residence
wadesmith
Posts: 6 Forumite
I currently own an appartment value approx 100k. I intend to buy a new home, which will become my main residence costing approximately 200k. I will keep and rent out my appartment. Will I pay the higher rate stamp duty on the new 200k house, even though it will be my main residence?
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Comments
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Yes, because you'll have two properties.0
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Yes.
Your property ownership is increasing from 1 to 2 and that is the trigger here.
If you sell property one within three years, you can claim back the surcharge as it was your main residence.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
I appreciate I need to pay the increased stamp duty as I am gaining a second home - I just thought I may only have to pay the 3% on the value of the appartment which will be rented out (£3,000 as opposed to £6,000).0
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It's all explained in HMRC's Guidance Note plus the million and one other threads on the forum about exactly the same thing.
You pay SDLT when you purchase a property. You have already purchased the property you live in so any SDLT calculations will be based on the purchase of the next property.0 -
Just seems really unfair that I'm paying it all on my main home. So, I could, in theory, purchase a 39k studio - move into the studio, rent my apartment, then three years down the line sell the studio and buy a 200k and I wouldn't ever need to pay the 3% charge?0
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No you're paying it on the purchase of an additional property. The surcharge is completely avoidable by selling your current home.0
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Yes but I'd be paying the "second home" tax on a property that is my main residence. I would be happy paying the tax on the value of my BTL property but just seems unfair paying it on the value of what will be my main residence. Either way, the rules are the rules. Thanks for clearing it up0
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Yes but I'd be paying the "second home" tax on a property that is my main residence. I would be happy paying the tax on the value of my BTL property but just seems unfair paying it on the value of what will be my main residence. Either way, the rules are the rules. Thanks for clearing it up
If it was done on your rules, everyone would buy a cheap BTL as their first house and then a more expensive house as their second to circumvent the rules???
The HMRC rules are more consistent and fairer. If you want to be a LL, pay for the privilege, not pay what you want"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
But people can do that quite easily anyway with the current rules? Someone could quite easily buy a 200k home as their main residence, then buy a 100k appartment, rent it out, and pay 3% on 100k as opposed to 200k?0
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yes they can, so what is your point? They own 1 property. they are increasing their portfolio to 2 properties, only one of which can be their home. QED the additional rate applies since they are now a multi property owner. It is not a tax on BTL , it is a tax on multi property ownersBut people can do that quite easily anyway with the current rules? Someone could quite easily buy a 200k home as their main residence, then buy a 100k appartment, rent it out, and pay 3% on 100k as opposed to 200k?Just seems really unfair that I'm paying it all on my main home. So, I could, in theory, purchase a 39k studio - move into the studio, rent my apartment, then three years down the line sell the studio and buy a 200k and I wouldn't ever need to pay the 3% charge?
there is a huge concession available to the home buyer in that they get a refund if they are REPLACING their existing home with a new home. In your various scenarios the ADDITIONAL (stop calling it purchase of a second home, that is not what the rules relate to) property is not a replacement, it is your first (non replacement) home or is a BTL and therefore is ineligible for the refund, just the same as buying a second/holiday "home" is also ineligible
yes you can buy a 39k studio as your main home, be below the ADDITIONAL property rate so no SDLT, and then sell it and move into a multimillion £ palace and you would not pay the additional rate, merely the standard rate
like all rules, there are boundaries, work with them0
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