Stamp duty

Rubberduck08 · 4 July 2018 at 6:12PM

Hi,

I currently own a property, I vacated and moved in with parents (informally renting a room) one year ago, I now rent this property out, my mortgage provider was made aware and I transitioned to a "consent to let" agreement.

I am looking to buy a second property, I am currently saving, my new property will be in the region of £200k (hopefully £20k downpayment). My old property is in the region of £270k with around £90k equity.

Do I have to pay the increased stamp duty on the new property? If so would it be more beneficial to remortgage my old property and make a purchase before November 2018 (as i wont have the downpayment by that date) or just go with it and save for the extra approximately 5k in stamp duty?

Thanks

Farmerbob · 4 July 2018 at 9:12PM

Yes you!!!8217;ll need to pay the Stamp Duty at the higher rate. I don!!!8217;t know the revelance of remortgaging your existing property, I guess you mean remortgage to a Buy to let? In which case you!!!8217;ll still be due the tax at the higher rate.

Rubberduck08 · 4 July 2018 at 9:15PM

Ummm but if you do it before November 2018 you won't have to pay, I'm just trying to get advice on which is best, paying the advanced stamp duty or switching to buy to let and using some equity to buy a house sooner

Thrugelmir · 4 July 2018 at 9:19PM

Will your income support £360k of debt. Releasing equity will be factored into any decision made. Both by the lender releasing and the lender advancing.

Farmerbob · 4 July 2018 at 9:22PM

As far as Im aware the tax is already in place (at least since April 2016) Ive not seen anything indicating it does not apply until Nov 18. Switching to BTL wont mitigate any additional tax as it includes owning a second residential home whether it is to live or let out. As far as realeasing equity I guess that depends on the affordability of having two mortgages, might be one for a broker