Stamp duty issue with conveyancing solicitor

Dreamslesssweet

Hi, hope someone can help

I own a house that I bought in 2015, I don’t live in it and I rent it out, it has a buy to let mortgage on it. Recently myself and my girlfriend have started the process of buying a house for us to live in. We are currently renting a property.

I spoke to a conveyancing solicitor and explained my situation and he sent me a quote for their services plus the stamp duty cost on top. The house price is £270,000 and I was told the stamp duty would be £3,500. We thought that was okay so we proceeded with the purchase process. We received an initial letter from the solicitors which again said £3,500 stamp duty as well as their fees so we signed it and sent it back. They did all their searches and a contract was agreed. When I’ve now received the contracts which included the stamp duty forms the amount is now £11,600.

How is this possible and how have they decided to tell us 2 days before we exchange contracts that it’s actually an additional £8,100?!

The whole thing is spinning me out as you can imagine.

aries_163

So you are unaware of the 3% extra SDLT for buying an additional property? The final figure is correct unfortunately- £11,6k is what you will need to pay as you already own a property. Google it - there is plenty of info out there. It seems your solicitor wrongly quoted the SDLT due the first time. This would have been the amount due if this were to be you’re only property owned at the time of completion.

Dreamslesssweet

I knew there was different percentages to pay depending on status but as I didn’t know anything about them I assumed the one I was quoted by the solicitor twice was the correct one and now all of a sudden it’s the higher one. If he told us that at the start I would have held off to save more money or at least told us 2-3 weeks ago before he done the searches!

I suppose now I figure out where to go from here. If I sell my buy to let property can I claim the stamp duty back?

aries_163

Not 100% sure but I don’t think you could claim it back in this situation. Have a google for the HMRC official guidance - it should all be in there. I think your current property would need to be your main residence in order to be able to claim a refund if you sold that property.

Dreamslesssweet

Thank you

AnotherJoe

Dreamslesssweet wrote: »

I knew there was different percentages to pay depending on status but as I didn’t know anything about them I assumed the one I was quoted by the solicitor twice was the correct one and now all of a sudden it’s the higher one. If he told us that at the start I would have held off to save more money or at least told us 2-3 weeks ago before he done the searches!

I suppose now I figure out where to go from here. If I sell my buy to let property can I claim the stamp duty back?

I dont believe you can. You'd have to sell it before you bought the new house. The issue is, it hasnt been your main residence at any time, as far as you've posted.

Perhaps SDLT_Geek will be along soon, in the meantime, post back, has it ever been your main residence? If it has, and within the past 3 years that may be a get out.


Also, not impressed with your conveyancer, they should have known this from the start.

Dreamslesssweet

It was a main residence when I first bought it and then I’ve changed the mortgage to buy to let.

When questioned on the figure my Solicitor has come back to me today with “Apologies on the stamp duty figure. I can confirm that we are aware it is the lower figure due.”

But after all this, it’s seems they’re not correct. I’ve actually not signed the final contracts or paid my deposit and now don’t know what to do.

AnotherJoe

how long ago was it your main residence? I think you have three years so if it was at 2 years ago then you'd have a year to sell the BTL and reclaim.
Try PMing SDLT geek

SDLT_Geek

If you still own the let property when you complete the purchase then it sounds as if the extra 3% SDLT will be due on the purchase. The value of the let property is not low enough that you are saved by the under £40K rule?

A sale of the let property within the three years after the proposed purchase would only entitle you to a refund of the extra 3% due on the purchase if you had lived in the let property as your only or main residence at some point in the three years leading up to the completion of the upcoming purchase.

Dreamslesssweet

Thank you! Yeah it seems the solicitor has given me the wrong info until the last minute. Luckily I've arranged to borrow the £8000 difference and pay it back bit by bit. I didn’t really want to sell my buy to let property as I purchased it with some inheritance money and saw it as a nest egg alongside my job.

Thank you again