First Time Buyer, Buy To Let - Which Rate of Stamp Duty?

moonsongs

Hi there,

Really sorry if this has been asked before. I am a first time buyer whose first property is going to be a buy to let flat (£200-£230k) with a buy to let mortgage and a sizeable deposit.

I have never owned a property before.

The question is would I a) pay the lower rate of stamp duty as it's my first property? Or b) would I pay the higher rate as it's buy to let?

I think the answer is a) but I've read the contrary and even a broker told me to check as he thought I would have to pay the higher rate.

Many thanks for your help!

da_rule

It will be the lower rate if you own no other properties.

kinger101

The additional SDLT rate has nothing to do with BTLs. It's a higher rate of tax on ALL additional properties. If you now own 0 properties, and will own 1 at the end, you'll pay standard rates.

moonsongs

Excellent, thanks for confirming @kinger101 and @da_rule.

Just to understand the process a bit better, does anyone know when and to whom the stamp duty is paid during the sale?

da_rule

You'll pay it to your solicitor. When exactly will depend on their process, but at the very latest it'll have to be with them in time for completion.

You can do the SDLT return yourself as solicitors do charge for filling the form out. But, some mortgage companies will insist that the solicitor does it.

Elfbert

moonsongs wrote: »

Excellent, thanks for confirming @kinger101 and @da_rule.

Just to understand the process a bit better, does anyone know when and to whom the stamp duty is paid during the sale?

I honestly don't mean to be rude - but you need to do a lot of learning if you're going into BTL!

Stamp duty is paid after completion (within 30 days), your solicitor will probably sort it out for you - you'll need to pay them the money, along with their fees/your deposit/search monies etc. but they'll then pay it on, and complete the paperwork.

You can do it yourself, though, if you need to. Google it, the .gov page is very simple.

dimbo61

Most BTL lenders want borrowers to already have a residential property with or without a mortgage.
It proves you are buying the second property as an Investment to rent out and not live in yourself.
Even with a big deposit you may struggle, don't forget the tax changes coming in April if your a higher rate tax payer

moonsongs

Thanks for the information, everyone.

@dimbo61: True, indeed. Few BTL lenders will lend to first time buyers.

kingstreet

You will need to demonstrate to a lender you can afford the purchase as a residential, so the lender can ensure you are not using the BTL rules to game the system and get a property to live in rather than to let.

Rachel6291

Hi Kingstreet,

I am in the same position as you and am wondering how it worked out - did you pay the stamp duty as if it were a 1st home or did you have to pay the 3% extra as it was BTL?

Many thanks
Rachel

Surrey_EA

Rachel6291 wrote: »

Hi Kingstreet,

I am in the same position as you and am wondering how it worked out - did you pay the stamp duty as if it were a 1st home or did you have to pay the 3% extra as it was BTL?

Many thanks
Rachel

kinger101 wrote: »

The additional SDLT rate has nothing to do with BTLs. It's a higher rate of tax on ALL additional properties. If you now own 0 properties, and will own 1 at the end, you'll pay standard rates.

Here you are