Stamp Duty second property avoidance

AdrianC

faye6174 said:

I hope it is OK to jump on this? Thought it would be easier than starting a new thread for the same topic. 
We (married if it matters) jointly own a property currently rented out with tenant. We are ourselves currently renting in a different area due to husbands job. 
We will be remortgaging our currently owned house to release equity and then buying another property which will become our main residence. 
Do we pay 3%? We have conflicting advice. 

You (plural, married) own property A (not your primary residence).
You live in property B (not owned, so not being sold).
You are retaining property A and buying property C (which will be your primary residence).

+3%, absolutely. You are starting with one property, and finishing with two.

IF you were selling A, and it had been your residence within 3yrs, then you would not pay +3%.

Slithery

Yes, as you are purchasing an additional property the additional tax is due.

davidmcn

faye6174 said:

Do we pay 3%? We have conflicting advice. 

Who's told you you wouldn't have to pay 3%, and on what basis? You're buying an additional property. 

anselld

faye6174 said:

I hope it is OK to jump on this? Thought it would be easier than starting a new thread for the same topic. 
We (married if it matters) jointly own a property currently rented out with tenant. We are ourselves currently renting in a different area due to husbands job. 
We will be remortgaging our currently owned house to release equity and then buying another property which will become our main residence. 
Do we pay 3%? We have conflicting advice. 

You are increasing your ownership from 1 to 2 so yes the 3% applies.

kazyaz

faye6174 if you are remortgaging your main property you would not need to pay stamp duty. 

If buying elsewhere I believe you will need to pay stamp duty @ 3% (if under £500k before April 2021) even if it's going to become your main property. However if you were to sell the rental property before hand you would be exempt. If you were to sell the rental property after you buy the new place you would be able to reclaim the 3% stamp duty within 3 years of completing the purchase of the new main property. Hope that helps.

greatcrested

You are buying an additional property.

You are not disposing of (selling) your current main residence.

grumiofoundation

kazyaz said:

faye6174 if you are remortgaging your main property you would not need to pay stamp duty. 

If buying elsewhere I believe you will need to pay stamp duty @ 3% (if under £500k before April 2021) even if it's going to become your main property. also if above 500k However if you were to sell the rental property before hand you would be exempt. If you were to sell the rental property after you buy the new place you would be able to reclaim the 3% stamp duty within 3 years of completing the purchase of the new main property. see below Hope that helps.

As explained by Adrian C the rental property would have to have been previous main residence. 

oldbikebloke

kazyaz said:

If you were to sell the rental property after you buy the new place you would be able to reclaim the 3% stamp duty within 3 years of completing the purchase of the new main property. Hope that helps.

not quite right
there is no indication that the rental property has been the main residence within the 3 year period leading up to the purchase of the additional/new property and therefore no replacement of a main residence has taken place to trigger entitlement to a refund

Condition D requires that: "The purchaser must have lived in the old property as the purchaser’s only or main residence at some point in the three year period leading up to the date of the purchase of the new property [Para 3(7) (c)]"
https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800