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Do you have to pay higher stamp duty if you buy/se
ChrisK....._3
Posts: 920 Forumite
So. We are currently living in our primary (and only) home and My wife is buying one secondary house to rent and one to replace or primary home
When she buys a primary home (We move), she will have to pay regular stamp duty. When she buys the second home to rent she will have pay extra stamp duty.
If she buys the home for rent first she will need to pay the higher stamp duty. So I'm wondering whether the order of buying the two homes is important. So my question is
Do you have to pay higher stamp duty if you buy/sell your primary home, if you already have a secondary home for rent?
When she buys a primary home (We move), she will have to pay regular stamp duty. When she buys the second home to rent she will have pay extra stamp duty.
If she buys the home for rent first she will need to pay the higher stamp duty. So I'm wondering whether the order of buying the two homes is important. So my question is
Do you have to pay higher stamp duty if you buy/sell your primary home, if you already have a secondary home for rent?
If I ruled the world.......
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Comments
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ChrisK..... wrote: »So. We are currently living in our primary home and My wife is buying one secondary house to rent and one to replace or primary home
When she buys a primary home (We move), she will have to pay regular stamp duty. We she buys the second home to rent she will have pay extra stamp duty.
If she buys the home for rent first she will need to pay the higher stamp duty. So I'm wondering whether the order of buying the two homes is important. So my question is
Do you have to pay higher stamp duty if you buy/sell your primary home, if you already have a secondary home for rent?
I really wish MSE would make a sticky about the higher rate of SDLT for the purchase of additional residential properties because there is a new thread on the forum every single day on this topic.
Read the Guidance Note, you will find your answers there.0 -
OP does not explain if the only property owned between OP and wife is the present home.
If so and it is sold, with an investment property bought first and a replacement home on a later date, then it can work out that neither purchase is liable to the surcharge.
But for purchases in Wales the treatment will be different from 1April 2018. The purchase of the investment property in that scenario is called an "intermediate transaction" and becomes liable to the surcharge when the replacement residence is bought.0 -
OP does not explain if the only property owned between OP and wife is the present home.
If so and it is sold, with an investment property bought first and a replacement home on a later date, then it can work out that neither purchase is liable to the surcharge.
SDLT Geek can you explain why?
Is it because there is a loophole whereby first they are buying one BTL house, so they own one house, so no extra SDLT, then soon after they are buying a replacement residence hence no extra SDLT?0 -
Correct. It is not so much a loophole as a feature of the way the higher rates of SDLT are structured. It depends on first disposing of a main residence, having no other properties that "count against" any of the buyers (or spouses) and then buying on different days in the right order.AnotherJoe wrote: »SDLT Geek can you explain why?
Is it because there is a loophole whereby first they are buying one BTL house, so they own one house, so no extra SDLT, then soon after they are buying a replacement residence hence no extra SDLT?0 -
yesAnotherJoe wrote: »SDLT Geek can you explain why?
Is it because there is a loophole whereby first they are buying one BTL house, so they own one house, so no extra SDLT, then soon after they are buying a replacement residence hence no extra SDLT?
1. sell main home
2. rent somewhere to live as new home
3. buy BTL property, at that point number of properties owned 0 so standard rate SDLT on purchase of BTL
4. do not under any circumstances move into the BTL
5. move out of rented home and buy "new" main home within the time limit for still claiming disposal of the old main home without having acquired an intervening home. Claim replacement rule so pay only Std rate.
utter rubbish design of the system seeing as its whole purpose is to discourage people buying and owning more than the home they live in at any one time. as ever it is the colonial authorities in Scotland and Wales who have seen through this and are in the process of closing it, but the English are still blinkered.0 -
Correct. It is not so much a loophole as a feature of the way the higher rates of SDLT are structured. It depends on first disposing of a main residence, having no other properties that "count against" any of the buyers (or spouses) and then buying on different days in the right order.
I'd say its clearly a loophole, as 00ec25 says, its ridiculous that such an obvious flaw wasn't catered for in the initial design of the system.
I had thought much earlier this might be a way round it but then discarded that thought without investigating "nah they must have catered for such an obvious avoidance tactic".0 -
AnotherJoe wrote: »I'd say its clearly a loophole, as 00ec25 says, its ridiculous that such an obvious flaw wasn't catered for in the initial design of the system.
I had thought much earlier this might be a way round it but then discarded that thought without investigating "nah they must have catered for such an obvious avoidance tactic".
Surely the HMRC would see through this no?"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
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