How to move house and keep current main residence as a rental!!

junobear

I’m useless with finances but have a questions. I currently have a small buy-to-let mortgage interest a flat that is rented out. My main residence is paid off but I want to move up the property ladder but rent this one out. I’m scared of the stamp duty if I keep this and also concerned about the tax I’ll pay in the rent. What’s the best way to do this? Should I sell my existing house or is there a way to keep it and buy another? Finance hurts my head! Ha 

Crashy_Time

Keep all your houses and buy another one later when prices fall, all the indications are that we are heading for very difficult economic times, and a "second wave" is a real possibility, the people out shouting about statues and defending statues are not helping one little bit either with suppressing this thing!

anselld

junobear said:

I’m useless with finances but have a questions. I currently have a small buy-to-let mortgage interest a flat that is rented out. My main residence is paid off but I want to move up the property ladder but rent this one out. I’m scared of the stamp duty if I keep this and also concerned about the tax I’ll pay in the rent. What’s the best way to do this? Should I sell my existing house or is there a way to keep it and buy another? Finance hurts my head! Ha 

That is at least four reasons why it is a bad idea.

Sibbers123

If you are looking for a tax efficient investment, then property isn't for you. You are already vested in the BTL property market, maybe you should diversify your investments (not put all your eggs in one basket) and invest in a stocks and shares via a pension (very tax efficient!) for example.

greatcrested

junobear said:

.... .... I want to move up the property ladder but rent this one out. I’m scared of the stamp duty if I keep this and also concerned about the tax I’ll pay in the rent. What’s the best way to do this? Should I sell my existing house or is there a way to keep it and buy another? Finance hurts my head! Ha 

I agree with the previous posters.

If you keep your current main residence and let it out, you'll pay additional SDLT on your new main residence. If you sell it, you won't.

If you rent your current main residence, you'll pay tax on the rent.

If those 2 costs scare you, then don't do it!

[Deleted User]

Remember that the second property you want to move out of has to make back the increased SDLT you will pay for the third property before you even begin to make any money from renting it out.  Then there's LA fees etc.  It might not be the money maker you are hoping.., as already suggested, there may be better options like investments.

getmore4less

I’m useless with finances 

Probably not a good idea to be running a business with complex finances.

I currently have a small buy-to-let mortgage interest a flat that is rented out...
 also concerned about the tax I’ll pay in the rent.

you should already understand the tax 

AdrianC

junobear said:

I’m useless with finances but have a questions. I currently have a small buy-to-let mortgage interest a flat that is rented out. My main residence is paid off but I want to move up the property ladder but rent this one out. I’m scared of the stamp duty if I keep this and also concerned about the tax I’ll pay in the rent. What’s the best way to do this? Should I sell my existing house or is there a way to keep it and buy another? Finance hurts my head! Ha 

What net yield are you getting from your current BtL business?
How do you think the net yield from this one will compare?

Mutton_Geoff

AdrianC said:

junobear said:

I’m useless with finances but have a questions. I currently have a small buy-to-let mortgage interest a flat that is rented out. My main residence is paid off but I want to move up the property ladder but rent this one out. I’m scared of the stamp duty if I keep this and also concerned about the tax I’ll pay in the rent. What’s the best way to do this? Should I sell my existing house or is there a way to keep it and buy another? Finance hurts my head! Ha 

What net yield are you getting from your current BtL business?
How do you think the net yield from this one will compare?

I blame HUTH for all these posts that imagine a BTL is a licence to print money!

Crashy_Time

Mutton_Geoff said:

AdrianC said:

junobear said:

I’m useless with finances but have a questions. I currently have a small buy-to-let mortgage interest a flat that is rented out. My main residence is paid off but I want to move up the property ladder but rent this one out. I’m scared of the stamp duty if I keep this and also concerned about the tax I’ll pay in the rent. What’s the best way to do this? Should I sell my existing house or is there a way to keep it and buy another? Finance hurts my head! Ha 

What net yield are you getting from your current BtL business?
How do you think the net yield from this one will compare?

I blame HUTH for all these posts that imagine a BTL is a licence to print money!

Well it was....for the banks.......different story now of course.
https://www.thisismoney.co.uk/money/news/article-8417969/TSB-axes-loan-deals-house-price-plunge-fear.html

Crashy_Time

getmore4less said:

I’m useless with finances 

Probably not a good idea to be running a business with complex finances.

I currently have a small buy-to-let mortgage interest a flat that is rented out...
 also concerned about the tax I’ll pay in the rent.

you should already understand the tax 

BTL finances are not particularly complex.