2nd home stamp duty refund?

Braders1234

Hello, I've been renting out my previous main residence for 3 years now and lived in it for 3 years before that. I bought a 2nd property with my brother 7 months ago which I'm living in and already thinking of selling. Does anyone know if I will be eligible for a refund of the extra stamp duty paid on this place if it sells and I move back into my previous main residence (the rented one) once the tenants contract has expired.

I'm aware that I'm eligible if I sell my rented previous residence first but have no clue if the same applies if selling the one that the higher stamp duty was paid on, it obviously a grey area as it not usually the way people do it.

The 50/50 place is also my brothers only property so there's no other places hindering the refund.

Thanks,

00ec25

no you can only get a refund if you PURCHASE a replacement main home, not if you re-occupy a property you already own

there is nothing grey about it at all, you just haven't read the guide properly:
https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-for-purchases-of-additional-residential-properties

para 3.1 particularly

Braders1234

Thanks for the answer, the grey area was because HMRC haven't been able to give difiniative answer after letters and phone calls and have said they're not 100% sure and to enquire once it's sold as it not a usual enquiry but they'd lean towards in not being eligible.

Braders1234

But that they also understood that I would have paid the higher stamp duty on a place and could be back down to one property within 1 year so it would be worth trying as it could be seen as paying to much tax. I wanted to ask on here incase someone had been in the same position.

SDLT_Geek

So you own and used to live in Home A which you retained when you bought Home B. You moved into Home B straight away and let out Home A. You paid the higher rates of stamp duty land tax when you bought Home B.


If you sell Home A within the three years following your purchase of Home B you are entitled to a refund of the extra 3% stamp duty land tax paid on the purchase of Home B.


If you sell Home B there are no provisions allowing you to claim a refund of the extra 3% paid on Home B. It is black and white law I am afraid. It is all in Finance Act 2003 / Sch 4ZA. See in particular paragraph 3(7).

p00hsticks

SDLT_Geek wrote: »

So you own and used to live in Home A which you retained when you bought Home B. You moved into Home B straight away and let out Home A.
.

According to the OP they weren't living in Home A when they bought home - they'd already been renting it our for around 30 months prior to the purchase. So it wasn't their main residence at the time of the second purchase.

SDLT_Geek

Good point, p00hsticks. The rules work in the same way if OP had lived in Home A as an only or main residence at any time within the three years prior to the purchase of Home B. See FA 2003 / Schedule 4ZA.

So if it is Home A which is sold OP will be able to reclaim the 3% duty, but not if Home B is sold.

00ec25

SDLT_Geek wrote: »

So if it is Home A which is sold OP will be able to reclaim the 3% duty, but not if Home B is sold.

indeed, but OP is already aware that he can claim a refund if selling A

Braders1234 wrote: »

I'm aware that I'm eligible if I sell my rented previous residence first but have no clue if the same applies if selling the one that the higher stamp duty was paid on,

the issue is I think we all agree that no refund is available for selling B and simply reoccupying A (so going from owning 2 to owning 1) as the legislation does not deal with reductions, only additions to property owning. Even the amendments in FA 2016 don't change that as all references to a transaction ceasing to be a higher rate one are with reference to whether the purchased property is, or is not, a replacement.
http://www.legislation.gov.uk/ukpga/2016/24/part/8/enacted

marv9n

Hi guys,

Interesting read! I have a question which is similar but slightly different:

My wife and I own a central London flat of around £600k, which I would really like to rent out.

We would look to move further out and are looking at properties of around £500k.

I am also currently in the process of completing on a buy to let of £175k for which I am paying the surcharge in stamp duty (around £6k).

If we decide to make the move eventually I thought it could be a good move to move into the £175k flat for (6 months?) to mark it as a main residence and in turn avoid paying the additional SD on the new place. Would this be possible?

I am now thinking I should just buy thr £175k as a resi hoke aboidong the £6k charge (more than my rent income for a year) and move into it prior to buying my new home.

Alternatively, is there anything that stops me purchasing an even cheaper home as a main residence, moving in but then selling that to buy the new home and avoid the surchage again?

Pixie5740

marv9n wrote: »

Hi guys,

Interesting read! I have a question which is similar but slightly different:

My wife and I own a central London flat of around £600k, which I would really like to rent out.

We would look to move further out and are looking at properties of around £500k.

I am also currently in the process of completing on a buy to let of £175k for which I am paying the surcharge in stamp duty (around £6k).

If we decide to make the move eventually I thought it could be a good move to move into the £175k flat for (6 months?) to mark it as a main residence and in turn avoid paying the additional SD on the new place. Would this be possible?

I am now thinking I should just buy thr £175k as a resi hoke aboidong the £6k charge (more than my rent income for a year) and move into it prior to buying my new home.

Alternatively, is there anything that stops me purchasing an even cheaper home as a main residence, moving in but then selling that to buy the new home and avoid the surchage again?

Why are you resurrecting an old thread when your question has already been asked and answered?

https://forums.moneysavingexpert.com/discussion/5913212/avoiding-stamp-duty-surcharge-with-a-temporary-main-residence

marv9n

I ran into this thread afterwards and was hoping for a reply from the people on this thread! Thanks