Buying second home as main residence

agrinnall

wadesmith wrote: »

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?

Yes, so why don't you? Sell the apartment, buy your new main home, then buy a rental property.

glasgowdan

Predictably most of the replies focus on disagreeing with the OPs thoughts, and seem affronted that someone who dares own two properties is looking at ways of tax reduction.

We'll, anyone in their position would probably feel the same. It feels totally reasonable to be expected to pay the higher tax on a second home OTHER than your home. I feel the laws are perhaps unfair in this particular scenario, but if there's no way around it I'm afraid OP is just very unlucky.

Selling the rental then buying a new one later would involve more than £3k worth of expenses so it's hardly a sensible decision. Neither is buying a budget home to then sell and upsize.

The thing is, £3k will quickly vanish from memory a year down the line, always think forwards and don't let hurdles stop you doing things you feel are right for you.

wadesmith

I always expected to pay the additional rate until it was suggested to me by a colleague that it didn't apply if you were purchasing the new property as a primary residence. Obviously my colleague was wrong, as this is only true if you're not increasing the number of properties you own (eg someone with three properties buys and sells a property that they use as their primary residence, they don't pay the additional tax).


It was on this basis that it then felt unfair that someone buying a second property that will be used as their main residence pays the tax on the value of what will be their primary residence as opposed to the second property.

Pixie5740

This is why you don't take tax advice from Tim in the office.

If it was done your way then landlords and people wanting second, third or even fourth homes could legitimately avoid paying the surcharge on the purchase of additional residential properties by constantly purchase new main residences. With any tax there are winner and there are losers.

getmore4less

wadesmith wrote: »

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?

So can you, just need to sell the first place and buy a different one.

p00hsticks

glasgowdan wrote: »

We'll, anyone in their position would probably feel the same. It feels totally reasonable to be expected to pay the higher tax on a second home OTHER than your home. I feel the laws are perhaps unfair in this particular scenario, but if there's no way around it I'm afraid OP is just very unlucky.

If primary homes were completely excluded though, it wouldn't capture the scenario where second time buyers decide to hang on to their existing property to rent out when they upsize rather than sell, which I think exactly covers the sort of behaviour that the legislation was intended to discourage (and is what the OP is intending to do).

booksurr

glasgowdan wrote: »

Predictably most of the replies focus on disagreeing with the OPs thoughts, and seem affronted that someone who dares own two properties is looking at ways of tax reduction.

We'll, anyone in their position would probably feel the same. It feels totally reasonable to be expected to pay the higher tax on a second home OTHER than your home. I feel the laws are perhaps unfair in this particular scenario, but if there's no way around it I'm afraid OP is just very unlucky.

OP is not unlucky, I think you have misread his OP.

Anyone who decides to become a LL by converting their current home into a let and buys a new property as their new home (ie the OP's proposal) is just the same as someone who keeps their existing home and buys a property to be let.

I think you will find public opinion not on your side. If one can afford to buy a new property without having to sell the old one, you are a multi property owner and THE SUN SAYS you are "wealthy" and should be taxed.