Stamp duty surcharge

AGhee

Hello,


I am not sure if u should pay the 3% surcharge.


I am a first time buyer in the UK. Although I do have a right to another property. The property was bought in 2012 and is still under construction and is due to be delivered in 2019. The land registry will be done in 2019 when the property will be delivered. Currently I am not allowed to sell the property to anyone other than the builder where in I have to pay penalty charges.


so I count as a first time buyer?

da_rule

Do you own another property in any country?

If so then it is an additional property for the purpose of SDLT.

davidmcn

AGhee wrote: »

I do have a right to another property. The property was bought in 2012 and is still under construction and is due to be delivered in 2019. The land registry will be done in 2019 when the property will be delivered.

If you mean you've entered into a contract to buy a property, but you're waiting for it to be built before you complete your purchase, then no, you do not own that property yet (and it sounds like you might never own it!). If and when you do buy it then (if it is in the UK) then you'll be liable for the additional rate of SDLT on its price if it is then an additional residential property.

AGhee

Even though I have made payments towards the construction of the property?

davidmcn

AGhee wrote: »

Even though I have made payments towards the construction of the property?

Seems rash of you to have done so, but (as far as we can tell from your description) you haven't bought it yet.

In fact, even if you did own the land, it probably doesn't count as a residential property until there's a residence built on it.

G_M

On what asis have you made payments? Are you actually the owner of

* the land?
* the (partly-built) property?

Or do you own nothing but have rashly agreed to pay someone to build a property they own, on land which they own?

00ec25

AGhee wrote: »

Even though I have made payments towards the construction of the property?

why have you not read the guide on how SDLT works?

https://www.gov.uk/stamp-duty-land-tax

you are liable to SDLT when the contract completes, not when you exchange contracts, not when you pay a deposit, not when you view a property and not when you think you might like to buy. You are liable when the contract completes.

i accept that may be confusing for someone not familiar with the legal system, a property contract is completed when you receive what you pay for (a house you can move into) and the money you owe is paid to the seller. Only at that point are you liable to SDLT. Obviously the word complete in that context has a different meaning to the completion of a building project

at the moment you appear to have never completed on anything so you own nothing and are a FTB

are you also going to buy ("complete") on a purchase of a different property before the off plan one is finished in 2019? If yes will you a) use that property as your main home and b) sell that property when you buy ("complete") the 2019 off plan one?

read the guide to the higher rate SDLT
https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-for-purchases-of-additional-residential-properties

saajan_12

What counts is when you complete on each purchase, which is unlikely to have happened until you have fully paid for a property. So,
- standard rate stamp duty on this purchase
- higher rate on the new build when it completes (assuming you don't sell the current property before then).

AGhee

My lawyers says exchange of contract means ownership then higher rate should apply

harrys_dad

AGhee wrote: »

My lawyers says exchange of contract means ownership then higher rate should apply

So, you have already paid a professional for their opinion, but now you want random people on the internet to disagree?

davidmcn

AGhee wrote: »

My lawyers says exchange of contract means ownership then higher rate should apply

I suspect either you or your lawyers are confused. And like I said above, even if you do own a patch of mud which might later become a house, it isn't currently a "residential property" for the purposes of this surcharge.