Need to sell - propery has tenant

dimbo61

https://www.legislate.tech/post/update-on-section-21-notices

Section 21 is now 2 months. 
However actually evicting a tenant can take alot longer

user1977

BlueC said:

dimbo61 said:

Sorry BlueC but if the poster owns one property and buys a second property he pays not just stamp duty but 3% extra.
Start eviction process ASAP as you have a much better chance of selling a vacant property than one with tenant/s 

I think he needs to speak to a conveyancer about this, because it is my strong understanding that if the property you are buying is for your own main residence (and you are only allowed one main residence) then you will only pay standard SDLT rates on it.

You are strongly wrong here. If you're increasing the number of residential properties you own, you pay higher rate SDLT. Doesn't matter what you're using them for.

theoretica

Which is why I suggest actually talking to estate agents who know the local market and the difference between selling that particular property with a tenant or vacant.

Pixie5740

jameslester78 said:

About 10 years ago I bought a flat, got made redundant, moved to the other side of the country for work, planned to move back eventually so rented it out rather than sell.

10 years and several tenants later, there are no signs of me returning; me and partner want to buy a place to live, so I have to sell else I open myself to higher rate of stamp duty (wouldnt be selling otherwise).

The property management company have told the tenant I want to sell and offered him first option, he doesnt want to buy. His contract expired. I dont want to be an !!!!!! and kick him out without warning so I offered him a final 6 month contract, no rent increase (actually he has never had a rent increase) and the option to exit the contract at any point that he finds a new place to live without any penalty.

No response.

management company ,one month ago regarding contract "Just to let you know that we haven’t heard from the tenant yet in regards to the below. His mobile hasn’t the facility to leave a voicemail either."

Realistically (I doubt he is going to respond now) what can I do (I dont want to deal with him direct, I really want to get the flat sold as soon as possible, Im happy to change management companies, I would be happy to sell with sitting tenant but i have been told this is almost impossible - is this true?)

If you want to sell why are you offering the tenant a 6 month fixed term contract? That makes no sense. As the tenancy appears to be periodic, the assuming the property is in England or Wales, issue a Section 21 to the tenant. A Section 21 on its own doesn’t end the tenancy but if the tenant doesn’t move out it does give you the option of going to court to get a possession order. There is no defence against a correctly issued Section 21. 

Who told you that it’s almost impossible to sell with a tenant in-situ? Someone posted on the board in response to another thread saying they had done just that. 

SDLT_Geek

BlueC said:

dimbo61 said:

Sorry BlueC but if the poster owns one property and buys a second property he pays not just stamp duty but 3% extra.
Start eviction process ASAP as you have a much better chance of selling a vacant property than one with tenant/s 

I think he needs to speak to a conveyancer about this, because it is my strong understanding that if the property you are buying is for your own main residence (and you are only allowed one main residence) then you will only pay standard SDLT rates on it.

Your strong understanding is wrong in this case.

BlueC

p00hsticks said:

BlueC said:

Explain what you mean about opening yourself to a higher rate of stamp duty? My understanding is that you are already not a first time buyer so you won't get reduced FTB rates, and the property you're buying is presumably for yourself so you won't pay the second-property rates either. You'll just pay standard stamp duty regardless of whether you sell this flat or not.

I don't beleive that's true - the OP currently owns one property. If they buy another they'll own two, so the purchase will be subject to the higher rate SDLT (assuming we're talking England here). The fact that they are buying it to live in is not relevant.

I think OP should get legal advice on that from a conveyancer. Dot gov states: "You will not pay the extra 3% SDLT if the property you're buying is replacing your main residence and that has already been sold."

Certainly if you already own a property as your main residence and also some BTL or other properties, then you would NOT pay extra 3% SDLT if you sold your main residence and then bought a new main residence. I am not sure how it works given that he doesn't currently own a main residence.

Pixie5740

BlueC said:

dimbo61 said:

Sorry BlueC but if the poster owns one property and buys a second property he pays not just stamp duty but 3% extra.
Start eviction process ASAP as you have a much better chance of selling a vacant property than one with tenant/s 

I think he needs to speak to a conveyancer about this, because it is my strong understanding that if the property you are buying is for your own main residence (and you are only allowed one main residence) then you will only pay standard SDLT rates on it.

I think you need to read the manual because your strong understanding is wrong. 

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730

BlueC

SDLT_Geek said:

BlueC said:

dimbo61 said:

Sorry BlueC but if the poster owns one property and buys a second property he pays not just stamp duty but 3% extra.
Start eviction process ASAP as you have a much better chance of selling a vacant property than one with tenant/s 

I think he needs to speak to a conveyancer about this, because it is my strong understanding that if the property you are buying is for your own main residence (and you are only allowed one main residence) then you will only pay standard SDLT rates on it.

Your strong understanding is wrong in this case.

Ha I thought it could be, but can you explain the intricacies of it?

If for example, in addition to the rental property, the OP also currently owned another house that was currently his main residence then he could sell that and buy another main residence without having to pay 3% extra SDLT on his purchase. i.e. the rental property he owns would be irrelevant.

Snookie12cat

jameslester78 said:

About 10 years ago I bought a flat, got made redundant, moved to the other side of the country for work, planned to move back eventually so rented it out rather than sell.

10 years and several tenants later, there are no signs of me returning; me and partner want to buy a place to live, so I have to sell else I open myself to higher rate of stamp duty (wouldnt be selling otherwise).

The property management company have told the tenant I want to sell and offered him first option, he doesnt want to buy. His contract expired. I dont want to be an !!!!!! and kick him out without warning so I offered him a final 6 month contract, no rent increase (actually he has never had a rent increase) and the option to exit the contract at any point that he finds a new place to live without any penalty.

No response.

management company ,one month ago regarding contract "Just to let you know that we haven’t heard from the tenant yet in regards to the below. His mobile hasn’t the facility to leave a voicemail either."

Realistically (I doubt he is going to respond now) what can I do (I dont want to deal with him direct, I really want to get the flat sold as soon as possible, Im happy to change management companies, I would be happy to sell with sitting tenant but i have been told this is almost impossible - is this true?)

No, its not untrue - I sold my rental of 10 years with a sitting tenant last month and it made it sell really quick (first viewing) as people saw a reliable tenant as a good investment and only investors came to see it. Why don't you give it a go?

Try it for a month and see if it sells with him in it and failing that, give notice and sell to a home buyer. I mean for that to happen though your tenant needs to not stop the viewings, but if the option is there for him to stay, then try it - much less risky than you get a buyer and he doesnt leave, thus losing the buyer and having to go to court.

SDLT_Geek

BlueC said:

p00hsticks said:

BlueC said:

Explain what you mean about opening yourself to a higher rate of stamp duty? My understanding is that you are already not a first time buyer so you won't get reduced FTB rates, and the property you're buying is presumably for yourself so you won't pay the second-property rates either. You'll just pay standard stamp duty regardless of whether you sell this flat or not.

I don't beleive that's true - the OP currently owns one property. If they buy another they'll own two, so the purchase will be subject to the higher rate SDLT (assuming we're talking England here). The fact that they are buying it to live in is not relevant.

I think OP should get legal advice on that from a conveyancer. Dot gov states: "You will not pay the extra 3% SDLT if the property you're buying is replacing your main residence and that has already been sold."

Certainly if you already own a property as your main residence and also some BTL or other properties, then you would NOT pay extra 3% SDLT if you sold your main residence and then bought a new main residence. I am not sure how it works given that he doesn't currently own a main residence.

The replacement exception from the 3% surcharge requires a sale or other disposal of a previous home.  OP will be liable for the 3% extra if they buy a new home while still owning the existing property.