Sdlt and buy to let

mm1985

Hi we are selling our residential home and buying a new one. We have a rental property and up until now have thought we would not be paying anything up to 500k. Our accountant has just said we would possibly be subject to the 3% surcharge. Is this correct @SDLT_Geek

moneysavinghero

You will own two homes, so yes you will have to pay the 3% surcharge.

You won't have to pay the standard SDLT rate, just the 3% surcharge, so it's not all bad. (provided you complete before the end of March)

mm1985

moneysavinghero said:

You will own two homes, so yes you will have to pay the 3% surcharge.

You won't have to pay the standard SDLT rate, just the 3% surcharge, so it's not all bad. (provided you complete before the end of March)

Government sdlt calculator seems to say otherwise 

mm1985

Gov.uk asks if we will own two or more properties after this purchase for which we answer yes. It then goes on to ask if we will be replacing our main residence...again we answer yes and it calculates our stamp duty at £2150. The house we are buying is £543k so surely we won’t be subject to the 3%

davidmcn

If you're selling your main residence and buying a new one (I presume completion of sale and purchase will be simultaneous?) then the additional property surcharge won't apply, even if you still own other properties.

AdrianC

mm1985 said:

Hi we are selling our residential home and buying a new one. We have a rental property and up until now have thought we would not be paying anything up to 500k. Our accountant has just said we would possibly be subject to the 3% surcharge. Is this correct @SDLT_Geek

To clarify...
You own A, and live in it.
You own B, and let it.
You are selling A and buying C.
You will own C, which you live in, and B.

No +3%. Replacing your primary residence.

mm1985

@AdrianC and @davidmcn yes that is correct we are selling our main residence and buying a new main residence. Our rental property will be on rent. Our accountant just seems to have thrown something at us that confused us and while we could afford it we would rather not shell this out 

SDLT_Geek

I agree that the "replacement exception" should apply, so the 3% surcharge should not be due.  You can find the detailed conditions to meet at SDLTM09800.

dimbo61

Are you going to complete before the 31st of March 2021 ?

mm1985

dimbo61 said:

Are you going to complete before the 31st of March 2021 ?

Yes we are exchanging Monday and completing next Thursday 

Sistergold

mm1985 said:

Gov.uk asks if we will own two or more properties after this purchase for which we answer yes. It then goes on to ask if we will be replacing our main residence...again we answer yes and it calculates our stamp duty at £2150. The house we are buying is £543k so surely we won’t be subject to the 3%

This is the correct scenario. When you are replacing your main residence. You need to now link the document to your accountant and educated him a bit which is what I had to do when I bought my house. In my case we had sold our residence due to divorce, rented for a few years had a buy to let. I then bought my own house now to live in and was then slapped with the then higher stamp duty bill. I had to frantically do the research myself like you have done and linked this to my solicitors and then paid the lower stamp duty as I had infact replaced my residence within 3yrs I think it was. We still had the buy to let in existence. Hope that help?