PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Buying another house before selling current one.

Options
Hi all, hope I can get some good advice on this. We have viewed a house we love and can just about to buy it from cash / investment reserves rather than go through the extended process of selling ours and almost inevitably losing this new one in the interim. 
I know about the 3% extra Stamp Duty payable on what would be classed as a second home but am I right in understanding that, as long as we do sell it within a 3 year period, then we will be able to reclaim all this extra cost back ?
Also, are there CGT implications when we do sell our current home ?

Really appreciate any feedback / views.

Thanks

E
«1

Comments

  • We've just done this exact same thing. We currently own two properties... completed on it in September.. plan to move into it the new year and sell our current one. 

    No CGT to pay and yes you will get a stamp duty refund when you sell the first property.
  • Slithery
    Slithery Posts: 6,046 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Photogenic
    No CGT to pay
    This may be true in your case but it isn't a general rule. CGT always needs to be calculated it's just if the amount due is less than your yearly allowance there will be nothing to pay.

  • Did this last year. Got the stamp duty refunded quite quickly - our solicitor applied for it.
  • Slithery said:
    No CGT to pay
    This may be true in your case but it isn't a general rule. CGT always needs to be calculated it's just if the amount due is less than your yearly allowance there will be nothing to pay.

    Not quite true....providing you have lived it full time the whole time you have owned it... no CGT to pay. (A few exceptions - e.g. rented some of it out etc - there is a handy tool on the link below)

    https://www.gov.uk/tax-relief-selling-home
  • Slithery
    Slithery Posts: 6,046 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Photogenic
    Slithery said:
    No CGT to pay
    This may be true in your case but it isn't a general rule. CGT always needs to be calculated it's just if the amount due is less than your yearly allowance there will be nothing to pay.

    Not quite true....providing you have lived it full time the whole time you have owned it... no CGT to pay.
    Correct. But in both yours and the OP's case this isn't what has happened, the property hasn't been your main residence for the entirety of the time you've owned it so the CGT calculation needs to be done.

  • Hi,

    We are in a very similar situation as we have found a house we want to move into. We can buy it outright before selling our current home that we have lived in since we purchased it in January 1996.

    The house we want to move in to needs modernising before we move in and we will be doing that over the next few months. We are also doing some cosmetic changes to our current home before we put it on the market as soon as we can move into our new home.

    Had a look at the tax relief/selling your home details on the .Gov site form and reading that it seems to suggest we would not be liable for capital gains tax. We are fully aware of the extra stamp duty that we will have to pay as at the time of purchase we will be owning two homes, however on filling in the SDLT form we have received from our solicitor question 3 asks will we end up owning more than one dwelling which the answer is yes (until we sell our current home) it then goes on to ask how much is the interest in the other dwelling worth? Might be being a bit dim here but does it mean we own 100% or is it asking for the actual value as we don't know that until we get the house valued.

    Question 10 asks do we intend to live in the new property as our only or main residence which only asks for a yes or no answer but our answer would be "yes once we have modernised it and have sold our current main residence" :/ .

    Any comments or advice will be much appreciated.

    Thanks 
  • SDLT_Geek
    SDLT_Geek Posts: 2,888 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    Hi,

    We are in a very similar situation as we have found a house we want to move into. We can buy it outright before selling our current home that we have lived in since we purchased it in January 1996.

    The house we want to move in to needs modernising before we move in and we will be doing that over the next few months. We are also doing some cosmetic changes to our current home before we put it on the market as soon as we can move into our new home.

    Had a look at the tax relief/selling your home details on the .Gov site form and reading that it seems to suggest we would not be liable for capital gains tax. We are fully aware of the extra stamp duty that we will have to pay as at the time of purchase we will be owning two homes, however on filling in the SDLT form we have received from our solicitor question 3 asks will we end up owning more than one dwelling which the answer is yes (until we sell our current home) it then goes on to ask how much is the interest in the other dwelling worth? Might be being a bit dim here but does it mean we own 100% or is it asking for the actual value as we don't know that until we get the house valued.

    Question 10 asks do we intend to live in the new property as our only or main residence which only asks for a yes or no answer but our answer would be "yes once we have modernised it and have sold our current main residence" :/ .

    Any comments or advice will be much appreciated.

    Thanks 
    Q3. The reason for asking about the value of the current home is that there is an exception from the 3% surcharge if the interest is worth less than £40,000.  So it should be enough to give a rough estimate of the value here.

    Q10.  This is about whether you will qualify to get the 3% extra SDLT back when the current home is sold.  It might be best to write your answer in full so the solicitor is fully in the picture.
  • SDLT_Geek said:
    Hi,

    We are in a very similar situation as we have found a house we want to move into. We can buy it outright before selling our current home that we have lived in since we purchased it in January 1996.

    The house we want to move in to needs modernising before we move in and we will be doing that over the next few months. We are also doing some cosmetic changes to our current home before we put it on the market as soon as we can move into our new home.

    Had a look at the tax relief/selling your home details on the .Gov site form and reading that it seems to suggest we would not be liable for capital gains tax. We are fully aware of the extra stamp duty that we will have to pay as at the time of purchase we will be owning two homes, however on filling in the SDLT form we have received from our solicitor question 3 asks will we end up owning more than one dwelling which the answer is yes (until we sell our current home) it then goes on to ask how much is the interest in the other dwelling worth? Might be being a bit dim here but does it mean we own 100% or is it asking for the actual value as we don't know that until we get the house valued.

    Question 10 asks do we intend to live in the new property as our only or main residence which only asks for a yes or no answer but our answer would be "yes once we have modernised it and have sold our current main residence" :/ .

    Any comments or advice will be much appreciated.

    Thanks 
    Q3. The reason for asking about the value of the current home is that there is an exception from the 3% surcharge if the interest is worth less than £40,000.  So it should be enough to give a rough estimate of the value here.

    Q10.  This is about whether you will qualify to get the 3% extra SDLT back when the current home is sold.  It might be best to write your answer in full so the solicitor is fully in the picture.
    Q10 would be a yes, you'd be doing a bit of modernising first (how longg, few weeks? couple of months?) but you do intend to make it yourmain home. No harm in explaining the full picture to solicitor I guess
  • SDLT_Geek said:
    Hi,

    We are in a very similar situation as we have found a house we want to move into. We can buy it outright before selling our current home that we have lived in since we purchased it in January 1996.

    The house we want to move in to needs modernising before we move in and we will be doing that over the next few months. We are also doing some cosmetic changes to our current home before we put it on the market as soon as we can move into our new home.

    Had a look at the tax relief/selling your home details on the .Gov site form and reading that it seems to suggest we would not be liable for capital gains tax. We are fully aware of the extra stamp duty that we will have to pay as at the time of purchase we will be owning two homes, however on filling in the SDLT form we have received from our solicitor question 3 asks will we end up owning more than one dwelling which the answer is yes (until we sell our current home) it then goes on to ask how much is the interest in the other dwelling worth? Might be being a bit dim here but does it mean we own 100% or is it asking for the actual value as we don't know that until we get the house valued.

    Question 10 asks do we intend to live in the new property as our only or main residence which only asks for a yes or no answer but our answer would be "yes once we have modernised it and have sold our current main residence" :/ .

    Any comments or advice will be much appreciated.

    Thanks 
    Q3. The reason for asking about the value of the current home is that there is an exception from the 3% surcharge if the interest is worth less than £40,000.  So it should be enough to give a rough estimate of the value here.

    Q10.  This is about whether you will qualify to get the 3% extra SDLT back when the current home is sold.  It might be best to write your answer in full so the solicitor is fully in the picture.
    Q10 would be a yes, you'd be doing a bit of modernising first (how longg, few weeks? couple of months?) but you do intend to make it yourmain home. No harm in explaining the full picture to solicitor I guess
    Thanks SDLT_Geek and rexmedorum.

    The new house isn't falling to bits but needs a complete make over.  As well as fully decorating it needs a new bathroom, kitchen, a downstairs cloakroom turning into a shower/toilet, new flooring throughout and hopefully a wall taking out to make a larger kitchen so will likely take several months and as yet until we exchange contracts we haven't organised the people in to do it yet as it is a new area we are moving to and we don't know who the best contractors are.

    Our current house hasn't been valued yet but going on house prices in this area I would assume a value around £275,000 so will easily exceed the £40,000 limit.

    I did ask the solicitor about what we should put for Q10 and he wasn't sure and in the bumf we have received from them they state they aren't tax experts :/  and suggested we speak to our accountant  :D we haven't got one. 

      
  • Scotbot
    Scotbot Posts: 1,535 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    Slithery said:
    Slithery said:
    No CGT to pay
    This may be true in your case but it isn't a general rule. CGT always needs to be calculated it's just if the amount due is less than your yearly allowance there will be nothing to pay.

    Not quite true....providing you have lived it full time the whole time you have owned it... no CGT to pay.
    Correct. But in both yours and the OP's case this isn't what has happened, the property hasn't been your main residence for the entirety of the time you've owned it so the CGT calculation needs to be done.

    Not sure were you get that idea from, the posters don't say which house they would be living in.  It's common to live in the original property whilst renovating the new one
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.9K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.9K Work, Benefits & Business
  • 598.8K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.