Stamp Duty Confusion...

SarahWhitesands

Hi, apologies in advance if this is a really silly question, but struggling to get my head round something....
I have a BTL property with a BTL mortgage. 
I am about to purchase another property with a residential mortgage, but likelihood is I will end up remortgaging in a year or so as a BTL.  
Would I have to pay stamp duty when I re-mortgage to BTL because I already have another property? 

Basically, I'm not sure whether to purchase a flat and live in it for a while, then re-mortgage as BTL in a few years OR to just purchase it as a BTL immediately and get a tenant straight in.

If I purchased it with residential and stayed there for a few years then remortgaged, would I avoid stamp duty?

Thanks - and sorry for what you'll probably all think is a silly question!

user1977

You pay stamp duty on purchases, not remortgages. You'll pay the additional dwelling supplement on your next purchase, no matter whether you're going to live in it straight away or not.

grumiofoundation

SarahWhitesands said:

Hi, apologies in advance if this is a really silly question, but struggling to get my head round something....
I have a BTL property with a BTL mortgage. 
I am about to purchase another property with a residential mortgage, but likelihood is I will end up remortgaging in a year or so as a BTL.  
Would I have to pay stamp duty when I re-mortgage to BTL because I already have another property? 

Basically, I'm not sure whether to purchase a flat and live in it for a while, then re-mortgage as BTL in a few years OR to just purchase it as a BTL immediately and get a tenant straight in.

If I purchased it with residential and stayed there for a few years then remortgaged, would I avoid stamp duty?

Thanks - and sorry for what you'll probably all think is a silly question!

As above stamp duty is paid on purchase.

You own property A.
You are buying property B - therefore you will pay the +3% SDLT surcharge on additional property purchase. Whether this purchase is for you to live in or is BTL does not impact this.*

*with the caveat that you don't pay the +3% SDLT if you are replacing your main residence (selling current main residence to buy property B as new main residence) - does this apply?

gingercordial

SarahWhitesands said:

Hi, apologies in advance if this is a really silly question, but struggling to get my head round something....
I have a BTL property with a BTL mortgage. 
I am about to purchase another property with a residential mortgage, but likelihood is I will end up remortgaging in a year or so as a BTL.  
Would I have to pay stamp duty when I re-mortgage to BTL because I already have another property? 

Basically, I'm not sure whether to purchase a flat and live in it for a while, then re-mortgage as BTL in a few years OR to just purchase it as a BTL immediately and get a tenant straight in.

If I purchased it with residential and stayed there for a few years then remortgaged, would I avoid stamp duty?

Thanks - and sorry for what you'll probably all think is a silly question!

Despite how it was portrayed in the media, the 3% extra SDLT is not a tax on BTLs.  It is a tax on additional properties.

If you currently have one property (your existing BTL) and you buy another property (to live in or BTL, doesn't matter) you will have gone from 1 property to 2.  That is an additional property so you will pay the 3% on purchase either way.

However you haven't said where you live now.  If you OWN a property that you live in now (as well as your BTL) and you buy another property to live in, and sell where you are living now, then you will have gone from 2 properties to 2 properties and no additional to pay. 

SarahWhitesands

Ok thanks all! Makes sense now