Stamp Duty on Lease Extension

Rinzai

Greetings,
I am new to the site. Looks amazing.
Question: how much will the stamp duty be on a lease extension of £450,000? Not a first time buyer.
thank you,
Andrew

SDLT_Geek

To answer this requires more information. Does the lease extension concern the only property you own, anywhere in the world?

Do you have interests in trust with property? Or are children under 18 entitled to property?

Or do you have a spouse / civil partner with property interests?

If so it might be relevant whether you live in the leasehold property as your only or main residence and for how long.

Rinzai

thank you for your help. Below are the answers to your questions.
1. I own other property in the UK.
2. No interests in trust with property or children under 18
3. Have a spouse but she doesn't have property interests.
4. Am purchasing property for son to live in (over 18)

da_rule

Based on a lease term of approximately 100 years and assuming that you are going down the statutory extension route so there is no ground rent, the stamp duty would be £26,000.

There may be more efficient ways of doing this, such as gifting your son the money for the extension etc. and putting the new lease in his name.

SDLT_Geek

I make it £26,000 as well as from what you say it seems the higher rates apply.

You called it a lease extension. So you already have a lease? Have you lived in the property throughout the last three years? You later say you are purchasing the property for your son to live in, so perhaps you do not already have a lease??


The analysis would be different if for example you buy a shortish lease for £300,000 and then spend £150,000 in extending it.

Rinzai

thank you for your reply. I am buying a property with a short lease and in the process of negotiating an extension. Am just now moving into the property.

da_rule

Are you still buying it, or are you moving in?
Are you negotiating and informal extension or has a statutory notice been served?
If it’s informal, what is the ground rent going to be, as ground rent also factors in to SDLT.

SDLT_Geek

Is the £450,000 all for the lease extension? On top of what you pay for the short lease? Or is the £450,000 broken down between buying the short lease and buying the extension?

So is this a home for you to live in long term, or is it for your son?

If this is being bought by you for you to live in as your only or main residence then we need to know if you have sold, or are selling, another property which you used to live in as your only or main residence.

More questions than answers, but the analysis is very fact specific.