Stamp Duty 2nd Property BTL Query

Cossack21

Hello everyone

Wondering if you can please help with a Stamp Duty Query

Property A was my main residence.  Owned it for few years, but moved in with my partner when she was pregnant.  I then rented the property out for last 18 months.

Now plan to purchase Property B, as current property is too small, so this is intended to be main residence, but plan to (short term at least) hold onto Property A.

Will the purchase of Property B pay the additional 3% Stamp Duty Tax?

Would welcome views etc.

user1977

Yes. You're increasing the number of properties you own. If you hold on to Property A for the very short term before you sell, you might then be able to reclaim the additional SDLT.

grumiofoundation

Yes +3% clearly due.

If you replace (i.e. sell) a previous main residence within 3 years you can claim back the +3%. So if only planning to hold onto property A for a short term you would have ~18 months to sell from now to be able to claim this back.

Edit: But this may be dependant on where you live now, partner owns? And if they/you will be keeping that property?

Cossack21

I live with my partner now, she will probably keep this property.

The point being that property A is now BTL, so clearly not my main residence, and my main residence is not owned by me.  Hence I want to understand if I buy a property that is then my main residence, with this incur the 3% uplift?

user1977

Yes, it will.

grumiofoundation

Yes you will have to pay the +3% uplift. 

You are going from owning 1 property to owning 2 (so is your partner). 

The main residence disposal exemption from paying the +3% only applies if you are disposing of (selling) selling your current (or former) main residence.

In the event you keep property A and partner's property then the following is not relevant.

To clarify you are not married?
And are buying new property together?

If unmarried even if your partner was selling her property then the +3% would still be due because you are increasing the number of properties you own. 

If you were married then selling partners property that had been your main residence would count as disposal of previous main residence for both of you and you would not have to pay the +3%.  

(The above re reclaiming is my understanding - if not sure SDLT_Geek will correct)

saajan_12

Cossack21 said:

I live with my partner now, she will probably keep this property.

The point being that property A is now BTL, so clearly not my main residence, and my main residence is not owned by me.  Hence I want to understand if I buy a property that is then my main residence, with this incur the 3% uplift?

Yes, the 3% is due on additional (2nd or 3rd or 4th.. ) properties, not on BTLs specifically.

There's an exception if you're also selling your previous main residence within a certain timeframe. 
But then if you're buying jointly with partner then you'd both need to sell your respective main residences within 3yrs of each moving out of your owned main residences. 

Cossack21

Can I please ask another question

can I buy a £40k share of my partners property without paying stamp duty?  It is mortgaged and the mortgage product expires soon