Stamp duty implication temporarily owning 2 homes

liamcas

Hi all. I'm a lucky position to buy a second home back in my home village which I want to renovate whilst remaining in my current home. I plan to sell my original home when renovation is complete to move to the village but only want to do this once the work has been done. Ultimately I'll only own one home but will temporarily own two.

I'm aware that as I already have a main residence that I plan to stay in, the second home will be subject to the 3% surcharge on stamp duty. But am I right in assuming that once the renovation is complete, if I sell my current home, making the newer purchase my only residence, can I claim the 3% surcharge back if it is done in less than 36 months?

Thanks

SDLT_Geek

So long as at the time you buy the new property you intend that you will live in it (when it is ready) then you should be able to recover the 3% SDLT surcharge when you sell your current property.

I would avoid calling the property your "second home" if indeed your intention is that in due course you will live in it as your only residence.

liamcas

Hi. Thanks. Regarding your point, what would you call it and would it make a difference?

Am I doing this the right way? My assumption is I shouldn't call something my main residence until I am ready to move in.

00ec25

liamcas wrote: »

Hi. Thanks. Regarding your point, what would you call it and would it make a difference?

Am I doing this the right way? My assumption is I shouldn't call something my main residence until I am ready to move in.

you could call it your replacement home since that is what the higher rate SDLT rule refers to

doesn't make much difference, and certainly none if you do it in the order you state within the timeframe allowed

SDLT_Geek

00ec25 is right, "replacement home" would be better, or you could refer to your "new home". To call it a "second home" in itself suggests that you might split your time between the two properties and that the other one is your main home.

pinklady21

It is 36 months in England. If the first property you own is in Scotland, then you have 18 months to sell it and claim a refund on the additional 3% tax paid when you buy the second one.

liamcas

Thanks for the advice. Once I move into my replacement home it will be my only property and I'll claim the 3% back.

Once I've done this does this mean there are rules about how long I live in the replacement home before moving up the property ladder in the village assuming a standard sale and purchase I.e no more second homes?

00ec25

liamcas wrote: »

Thanks for the advice. Once I move into my replacement home it will be my only property and I'll claim the 3% back.

Once I've done this does this mean there are rules about how long I live in the replacement home before moving up the property ladder in the village assuming a standard sale and purchase I.e no more second homes?

your home is your home. Time served is one of very many factors that make it your home, but there is certainly no magic time served threshold.

the law says each case is based on its own facts, and those facts are subjectively assessed, not ticked against a list. Either it is your de facto home, or it isn't.