Second property additional stamp duty.

longleggedhair

I am considering purchasing the house next door that has just gone up for sale. The house was originally one and split into two several years ago. Would I still be liable for the additional tax, as I shall not technically buying a second property, but one that will become part of my current home. Thanks.

[Deleted User]

If you bought it normally it would count as a 2nd property as it is presumably on a separate title and is obviously being sold as a separate house.  If you knocked in to 1 at a later date it wouldnt make any difference as the refund would only be due if you disposed of your current property.   That wouldnt be the case so i would reckon you would be liable for the full payment and no refund due

I wonder though are you able to purchase the property and amalgamate the titles at the same time? Would this count as a single property?  I wouldn't have thought so as you would need to do it in 2 stages with the purchase of the other property being the first stage and the amalgamation being the 2nd stage.  Again I would expect the 1st stage purchase to give rise to the charge.  

davidmcn

Deleted_User said:

I wonder though are you able to purchase the property and amalgamate the titles at the same time? Would this count as a single property?  I wouldn't have thought so as you would need to do it in 2 stages with the purchase of the other property being the first stage and the amalgamation being the 2nd stage.  Again I would expect the 1st stage purchase to give rise to the charge.  

Correct, the stamp duty is based on the position as at the date of completion, not what happens afterwards. So it would be a purchase of a second residential property.

greatcrested

longleggedhair said:

I am considering purchasing the house next door that has just gone up for sale. The house was originally one and split into two several years ago. Would I still be liable for the additional tax, as I shall not technically buying a second property, but one that will become part of my current home. Thanks.

The word 'technically' has no legal meaning: it's either a second property or it is not.

But the key is the bold above. At the time of the purchase, it is a 2nd property.

As Deleted_User says, you could only reclaim the aditional SDLT if you sold your main residence within 3 years, which does not seem to be your intention.

SDLT_Geek

There is an example like this in the HMRC manual.  https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730 They say the extra 3% is due and not recoverable on the conversion.

hazyjo

Do you have a mortgage (and will you need one)? Two into one are often worth less so may (/will probably) be an issue for your lender. Especially as, during the works, it may be considered devalued.