Stamp Duty question

Torrevieja

My wife and I have been looking to move house for some time, but struggling to find the perfect property. We are also looking for a buy-to-let investment, and wondering if we could avoid further frustration and kill two birds with one stone. This would involve selling our current house, and purchasing a buy to let flat. We would then live in the buy-to-let while we renovate it and wait for the perfect long term home. When the perfect home is available, we would purchase it, move in and rent out the buy to let.

I was wondering about the stamp duty implications - is there any way of doing the above without our 'long-term' (and more expensive) home being considered a second property for the purposes of stamp duty when we come to purchase it?

Many thanks in advance

SpiderLegs

You can’t get a buy to let and move in to it.

But in answer to your actual question, no there isn’t.

AdrianC

SpiderLegs wrote: »

You can’t get a buy to let and move in to it.

Of course you can. A BtL mortgage lender might have objections, but the OP doesn't mention borrowing...

OP - if you break the chain by selling your primary residence first, then you can still count it for SDLT within 3yrs. Basically same exemption as selling the old primary after buying the new, but t'other way round, and without needing to pay then reclaim.

gardian8

This is essentially what I am looking to do, I am looking at getting a variable rate mortgage with no early repayment fee when I move in to do the renovations. I will then convert the mortgage to a BTL. I am putting down at least 25% deposit on the investment property so this will be easier at the time to covert to BTL. The additional stamp duty is non avoidable though, as far as I know.

Tom99

AdrianC wrote: »

Of course you can. A BtL mortgage lender might have objections, but the OP doesn't mention borrowing...

OP - if you break the chain by selling your primary residence first, then you can still count it for SDLT within 3yrs. Basically same exemption as selling the old primary after buying the new, but t'other way round, and without needing to pay then reclaim.

I would have thought that when the OP buys and moves in to the flat they have replaced their primary residence with the flat which then will not be subject to the +3%. If they don't sell the flat then when the buy another primary residence they would be liable for the +3% on that 2nd purchase.

Maybe if you buy the flat before you sell the current property?

sheramber

AdrianC wrote: »

Of course you can. A BtL mortgage lender might have objections, but the OP doesn't mention borrowing...

OP - if you break the chain by selling your primary residence first, then you can still count it for SDLT within 3yrs. Basically same exemption as selling the old primary after buying the new, but t'other way round, and without needing to pay then reclaim.

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09805
She must not have acquired another new main residence after the disposal and before the purchase

.Would that not exclude the OP as she has bought a new main residence- the flat- which intends to live in as her main residence while renovating it?

AdrianC

Ah, good point.

Tom99

Buy the flat before you sell the existing property and pay +3% SD. Then sell the property you have and move into the flat but do not reclaim the +3%.
Then within 3yrs of selling (or last living in) the current property buy the new 'replacement' residence without any additional SD.

SDLT_Geek

There might be an even better strategy here if you do not intend to live in the flat as your home. That can mean standard rate SDLT on both transactions.

But it does not work if the flat is in Wales as LTT blocks this saving.

Nor would it work if you have other property interests.

Tom99

SDLT_Geek wrote: »

There might be an even better strategy here if you do not intend to live in the flat as your home. That can mean standard rate SDLT on both transactions.
But it does not work if the flat is in Wales as LTT blocks this saving.
Nor would it work if you have other property interests.

How would that work? Can you move into your only property but not call it your home?

SDLT_Geek

It would be clearer if the flat was not lived in at all. But occupying a property for a short while whilst it is on the market to be let and whilst doing work to prepare it for renting is unlikely to make it enough to be the person's "residence". If there is a lot of money at stake it would be best not to risk it and to live somewhere more comfortable whilst the work is done to the flat.