Stamp duty query about owning rental property

Ricky116

SDLT_Geek said:

The HMRC guidance in their manual explains it, especially SDLTM09800. In your case the "replacement exception" does not apply because you are retaining ownership of your old home.

I see, so the idea is that you are replacing your main residence because you are selling your current main residence before your purchase. The fact that you have an additional rental property doesn't come in to it.

But in my case, I am not replacing my main residence because I am not selling my current main residence. In order to do what you are doing, I would need to not live in my current main residence for some time before buying a new one (3 years).

I think that makes sense, thanks!

On a related note: I only intend to rent my current main residence due to necessity, and in fact aim to sell it as soon as possible (within 3 years). Ideally I would not pay any SDLT, but I think I am forced to pay it upfront then apply for a refund later when it is sold... right?

SDLT_Geek

Ricky116 said:

SDLT_Geek said:

The HMRC guidance in their manual explains it, especially SDLTM09800. In your case the "replacement exception" does not apply because you are retaining ownership of your old home.

I see, so the idea is that you are replacing your main residence because you are selling your current main residence before your purchase.
Correct
The fact that you have an additional rental property doesn't come in to it.
If someone has other properties, they can still escape the 3% SDLT surcharge if they are selling their current home and buying a new one.
But in my case, I am not replacing my main residence because I am not selling my current main residence.
Correct, so the extra 3% will be due.
In order to do what you are doing, I would need to not live in my current main residence for some time before buying a new one (3 years).
No, that it not how it works.  This would make your position worse!  It would mean that if you sold your old home after buying your new home, you would not be entitled to a refund of the extra 3% SDLT.
I think that makes sense, thanks!

On a related note: I only intend to rent my current main residence due to necessity, and in fact aim to sell it as soon as possible (within 3 years). Ideally I would not pay any SDLT, but I think I am forced to pay it upfront then apply for a refund later when it is sold... right?

Yes, that is right.  Pay the 3% surcharge and then apply for a refund when the old one is sold.