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Stamp duty when current residence is rented
jeanniejelly
Posts: 12 Forumite
I am in the process of buying a new home for £150K. Currently our main residence is and has been for some years a rental property (long story) but I also own a small flat which which is currently rented out . I am in the process of selling the flat but the purchase of the house is completing first. To be clear, I haven't lived in the flat for around 15years, I bought it but then was in negative equity for a large part of my ownership so decided to rent it rather than sell. My solicitors have now advised that I will need to pay stamp duty on the house purchase as I own the flat. I checked on the HMRC website and it said that stamp duty isn't due on sales of this value if you're replacing your main residence (which I am) but obviously our main residence is a rental property so there won't be a subsequent sale to offset. Does anyone have any experience of this kind of situation as, to be honest, I'm totally confused?
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No you're not. Replacing your main residence means selling your main residence and buying a new main residence. You're not doing that. Otherwise it would mean anybody could escape the surcharge just by moving house every time they added another property to their portfolio.jeanniejelly said:I checked on the HMRC website and it said that stamp duty isn't due on sales of this value if you're replacing your main residence (which I am)1 -
If your let flat is worth £40,000 or more, then the extra 3% SDLT will be due on the purchase of your home. The extra 3% will not be recoverable by virtue of later selling the let flat.
You do not count as "replacing" your main residence as that involves a sale (or other disposal). You cannot meet the conditions because you do not own your residence, but rent it.
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Ok, thanks for the info. I was confused by the term 'main residence' as it wasn't clear to me that you can only mainly reside in a property that you own.0
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No, your main residence = the one you pay rent on and live in. You don't have to own it.jeanniejelly said:Ok, thanks for the info. I was confused by the term 'main residence' as it wasn't clear to me that you can only mainly reside in a property that you own.
"replacing" = selling and buying another (for this purpose)
So you can 'mainly reside' in it, the thing is you can't replace it as you don't own it.
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1) You own a property which is not your main residence.2) You live in a property which is your main residence but which you do not own3) you are buying a 2nd property4) you are not selling your main residence (2) and replacing it with a new main resdence (3)You pay the 2nd property SDLT.1
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