Buying house

jimBean1970

Here's the problem - we are buying a house that needs a bit of renovation but we are looking to stay in our present home until work is complete. We would be putting our current home on the market once work starts on the work. We have the money to buy second home but we would need to take loan to pay for renovation of the new one and the enhanced stamp duty as we would own two homes. When we sell our current home we would be paying off the debt. Wondering if anyone has been in same boat and what are our options for remortgaging inorder to get over this transition period?? Anythings to look out for etc - thanks!!!128077;

G_M

Shop around for the best remortgage deal you can get, and/or fund the renovations with 0% credit cards.

SDLT_Geek

Are you sure that the 3% SDLT surcharge is due? Might you be saved by your property owning history? Perhaps you have had overlapping property ownerships before. You could escape the surcharge if:


(a) Since buying your present home you sold another property which you used to live in.
(b) You complete your purchase by 26 November 2018.


Although this sounds like an unusual combination of circumstances it is surprising how often it comes up! Quite a few people must be paying the higher rates of stamp duty land tax when they do not need to. It will be less of an issue though when the three year rules come into full operation after 26 November 2018.

jimBean1970

Thanks for the reply. My understanding of the rule was you had to sell your own home the day you purchased the second one. if not you would be deemed to being owning a second home.
it says in the guidance notes that you MAY be able to reclaim back the additional charge if you sell your first home within 36 months. Don't like the word MAY:-(

SDLT_Geek

There are a set of conditions to escape the surcharge based on the replacement of one's only or main home. They do not always operate entirely as one would expect.


That is why it is worth checking your property owning history. It might not matter that you keep your present home if you can rely on a sale of a previous home to get you within the replacement exception.

The word "may" is there in the guidance to make it clear that there are conditions to meet. They are in Finance Act 2003/Schedule 4ZA / para 3(6) (if you are lucky and can rely on an earlier sale) and in para 3(7) if you have to pay the 3% surcharge in the first place and then recover it on a later sale.

jimBean1970

Our existing home was our first home and the intention is to sell this once work is complete on the new property. So where would we stand in relation to being able to reclaim the additional stamp duty or being exempt?

spendinglikemad

Hi there - yes we did this - raised a mortgage on our current house (which was up for sale) to get the deposit and got a new mortgage on the new property and yes extra stamp duty pad but will get that back once first house sells.

Meant 2 mortgage payments and 2 sets of bills - we did have a pot of savings (as we didn't want to raise more mortgage to pay for renovations) and we just concentrated on the essential renovations to move in and will be the rest once the sale of old house goes through

Just depends on how much savings pot and mortgage you can handle in the short term

SLM

Beekay18

It can be quite costly to upgrade a second-hand home, not to mention correcting any ropy DIY attempts which only become visible after you move in. New properties are built to exceptionally high specifications so you don't need to worry about repair and maintenance work. I work for a home builder and can tell you these homes are contemporary, built for specific needs and come with appliances all inclusive in the price.

As for your current home, the home builder will purchase your property, meaning you avoid estate agent’s fees. What’s more, you’ll even have the freedom to stay in your current home until your new home is ready to move into.