SDLT

Bea787

What am I missing please? I did calculations before the SDLT holiday on how much stamp duty would be if I bought a new house prior to selling our current one. On a property costing £256000 the calculation was £10560 if bought before selling or £2850 if bought linked with the sale (ie. not an additional property). 
Since the SDLT holiday I have recalculated and the SDLT would be zero or £7680 as a second property. 
Thats only £30 less than the extra expense if bought before the change (10560-2850 = 7710).
Have I got that right?
Please be kind - am sleep deprived!

What are people’s thoughts on property as an investment? Am torn re whether to sell or rent out our current house. 

grumiofoundation

You have it right in that the +3% SDLT charge (£7680) for buying a second home has not changed (if that was your question?).

What are people’s thoughts on property as an investment? Am torn re whether to sell or rent out our current house. 

Without knowing your financial situation it is difficult to answer.

Q1 - do you actually want to be come a landlord and all the associated work that comes with it?
Q3 - Can you afford to be a landlord? Do you have the cash reserve to cover repairs, voids, legals fees, paying 2 mortgages if no rent is paid?
Q3 - How will you feel if your tenants don't treat your former family home in the way you would like?
Q4 - what would be the profit you would make on this business? Uou also have to consider the first £7680 of profit is just paying off the stamp duty - this will likely be your first years profits, or longer, out the window. 
Q5 - would it be better for you to instead pay into pension and/or stocks and shares ISAs (more tax efficient)?
Q6 - will keeping property A impact your affordability of property B? Both in terms of mortgage you can get and deposit?

I am sure there are many other point, and I am sure other posters will be along soon to post them too. 

saajan_12

Bea787 said:

What am I missing please? I did calculations before the SDLT holiday on how much stamp duty would be if I bought a new house prior to selling our current one. On a property costing £256000 the calculation was £10560 if bought before selling or £2850 if bought linked with the sale (ie. not an additional property). 
Since the SDLT holiday I have recalculated and the SDLT would be zero or £7680 as a second property. 
Thats only £30 less than the extra expense if bought before the change (10560-2850 = 7710).

Your first calculation looks a little off. I know the additional 3 % is quoted as within the bands, but its easier to think of it separately and mathematically the same.
Before, if the sale / purchase were linked it would be £2,800 stamp duty. Breakdown is: 
125k @ 0% 
125k @ 2%
6k @ 5% 
= £2,800 
Now, that's changed to £0 for properties under 500k. 
In both cases, the extra 3% still applies on the whole amount, so £7,680.
So the difference between buying first then selling vs linked transactions will be the same (not £30 off). 

davidmcn

Bea787 said:

What am I missing please? I did calculations before the SDLT holiday on how much stamp duty would be if I bought a new house prior to selling our current one. On a property costing £256000 the calculation was £10560 if bought before selling or £2850 if bought linked with the sale (ie. not an additional property). 
Since the SDLT holiday I have recalculated and the SDLT would be zero or £7680 as a second property. 
Thats only £30 less than the extra expense if bought before the change (10560-2850 = 7710).
Have I got that right?

I think you'll need to show us your working if you want us to point out where you're going wrong. Probably simplest if you just use HMRC's calculator here: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro
and change the details. As said though the "holiday" makes no difference to the additional rate of SDLT, only the "normal" element of it.

Bea787

Thanks all. I used an online calculator for the first figures. I’ve no idea what’s gone on to have them wrong as they were reflected in the solicitors correspondence too. Anyway, I’m clearer now that the SDLT is the same regardless so thank you.
Am completely torn re decision to sell or rent, mostly because everything is so unpredictable just now. I’ve been a landlord before very reluctantly and had a rough time of it, but this is a completely different type of property and potentially a smoother let. Previously I had to rent out a family home that became a HMO (multiple occupancy student let) and also sold in negative equity. So I guess I’ve been stung before. It’s hard to know whether the investment in property will be greater than investing the money instead. My instinct is that it will, but I don’t really want the hassle. But I’m wondering if it’s not the wisest financial decision to sell. I keep going round in circles! If anyone has any further gems of wisdom please do let me know!