Selling a house before buying

gaz1990_2

Hi. My wife and I (along with my parents, who own half between them) are looking to sell our home. We've just received an offer that we think we might accept, but we've not lined up a house to buy yet. As we're moving 100 miles away (closer to family) we've decided to move in with my wife's parents temporarily (hopefully only for a few months) so that we can search for a new home more easily. We'll be looking to buy a property with the full amount received from the sale of the house (i.e. everyone's share of the money).

This is the first time that we've sold a house and, with the circumstances above, I was wondering whether there will be any additional tax implications or costs to pay considering the delay (of potentially at least a few months) between buying and selling. Does anyone know? And, if anyone has been through anything similar, any further advice or tips would be a massive help as well.

Any information at all would be greatly appreciated and apologies if I've missed any vital detail. Many thanks.

jbainbridge

No drawbacks at all. Once you've sold and have the money in the bank you can buy without the stress of selling at the same time!

Thrugelmir

Where are your parents moving to? 

gaz1990_2

jbainbridge said:

No drawbacks at all. Once you've sold and have the money in the bank you can buy without the stress of selling at the same time!

Thanks for the quick reply, jbainbridge. So, theoretically, I could wait as long as necessary to buy the right home?

gaz1990_2

Thrugelmir said:

Where are your parents moving to? 

They helped us buy our current (first) home and they actually have their own home that they live in. We moved away for work and we're looking to move back closer to them now that they're getting older.

On a slightly different note, I also have a small percentage of two other houses owned by family members in my name (I don't/won't live in those houses, they provide me with no income etc.). Does anyone know if this will cause any complications?

Many thanks.

greatcrested

Not just theoretically.

I'm not really sure what your concern is.

You sell a property. No tax.

You either distribute the money received (after payiny any legal and estate agents fees, and any outstanding mortgage etc) between the joint owners, or, with their agreement keep it all yourself. No tax.

You shove it in a saving account with instant or short term access. You pay tax on any interest you earn.

You find a property and use your savings to pay for it (with or without an additional mortgage). You pay SDLT in the usual way on a purchase.

gaz1990_2

greatcrested said:

Not just theoretically.

I'm not really sure what your concern is.

You sell a property. No tax.

You either distribute the money received (after payiny any legal and estate agents fees, and any outstanding mortgage etc) between the joint owners, or, with their agreement keep it all yourself. No tax.

You shove it in a saving account with instant or short term access. You pay tax on any interest you earn.

You find a property and use your savings to pay for it (with or without an additional mortgage). You pay SDLT in the usual way on a purchase.

It's just cautiousness on my behalf due to never selling a property before. I didn't know whether there would be any Capital Gains Tax (or any other kind of tax) due to not using the money straight away or due to the property being split four ways, but it sounds like there's no real need to worry. Thanks for the info.

tigerlily74

I am in a similar situation, the issues I have become aware of would be around mortgages, which it sounds like wouldn’t apply, and prices going up while the value of your cash stays the same/decreases if tied up investments. The stamp duty holiday is ending in March, so that may increase your costs. 

amandacat

I’m in the process of selling, relocating and renting. We will then look for somewhere to buy. 
The disadvantages are that we will miss out on the stamp duty holiday on our onward purchase. Also the hassle of moving twice. 
The advantages are having more time to choose our forever home, making sure we choose the right area and not having the stress of a chain.  We ‘might’ also get a better price on our next home with not having anything to sell. 

AnotherJoe

gaz1990_2 said:

jbainbridge said:

No drawbacks at all. Once you've sold and have the money in the bank you can buy without the stress of selling at the same time!

Thanks for the quick reply, jbainbridge. So, theoretically, I could wait as long as necessary to buy the right home?

Well, maybe your parents will have an opinion on that

SDLT_Geek

gaz1990_2 said:

They helped us buy our current (first) home and they actually have their own home that they live in. 

If your parents have a share in the new property with you, but own another property, then the extra 3% SDLT will apply to the whole of the price of the new property.