Stamp Duty on re-mortgaged 2nd house?

warwick2001

Afternoon all,

Just got a question for you knowledgeable folk.

We are in the process of buying a house for us to live in (£182k mortgage). House A

Our current house is being remortgaged with a BTL mortgage (£85k BLT mortgage). House B

We have just received our completion certificate from our solicitor, and there appears to be only 1 stamp duty payment, and it appears to be attached to House A.

I have read that "Stamp Duty Land Tax is not payable unless there is a need to transfer the legal title of your home as part of the remortgage transaction". And technically this is the case, we are not changing the legal title. However, I am positive I should be paying 2 lots of stamp duty on the purchase/re-mortgage as we will have 2 houses, House A is our home, House B will be rented out.

Can anyone advise please.

Many thanks

SDLT_Geek

warwick2001 said:

Afternoon all,

Just got a question for you knowledgeable folk.

We are in the process of buying a house for us to live in (£182k mortgage). House A

Our current house is being remortgaged with a BTL mortgage (£85k BLT mortgage). House B

We have just received our completion certificate from our solicitor, and there appears to be only 1 stamp duty payment, and it appears to be attached to House A.

I have read that "Stamp Duty Land Tax is not payable unless there is a need to transfer the legal title of your home as part of the remortgage transaction". And technically this is the case, we are not changing the legal title. However, I am positive I should be paying 2 lots of stamp duty on the purchase/re-mortgage as we will have 2 houses, House A is our home, House B will be rented out.

Can anyone advise please.

Many thanks

I would expect you to pay SDLT only on the property you are buying, House A, but with the extra 3% for additional properties.  If you say what the price is, I could work out the SDLT to see if it matches what your solicitor says.

I would not expect you to have to pay SDLT on the remortgage of House B, unless its underlying ownership is also changing.

user1977

warwick2001 said:

I am positive I should be paying 2 lots of stamp duty on the purchase/re-mortgage as we will have 2 houses, House A is our home, House B will be rented out.

Why are you positive about this? Remortgages do not incur stamp duty - which you appear to know. There is no stamp duty issue about remortgaging House B.

The stamp duty for your purchase should however reflect that it's an additional dwelling you're buying, so will have the 3% (or 4% depending where you are) surcharge.

warwick2001

Thanks to both replies. 

I was sure I'd have to pay 2 lots of stamp duty as I assumed since I was paying it on House A, and as House B is now our 2nd home I'd be paying SD on that one as well.

Happy days!!!!

warwick2001

SDLT_Geek said:

warwick2001 said:

Afternoon all,

Just got a question for you knowledgeable folk.

We are in the process of buying a house for us to live in (£182k mortgage). House A

Our current house is being remortgaged with a BTL mortgage (£85k BLT mortgage). House B

We have just received our completion certificate from our solicitor, and there appears to be only 1 stamp duty payment, and it appears to be attached to House A.

I have read that "Stamp Duty Land Tax is not payable unless there is a need to transfer the legal title of your home as part of the remortgage transaction". And technically this is the case, we are not changing the legal title. However, I am positive I should be paying 2 lots of stamp duty on the purchase/re-mortgage as we will have 2 houses, House A is our home, House B will be rented out.

Can anyone advise please.

Many thanks

I would expect you to pay SDLT only on the property you are buying, House A, but with the extra 3% for additional properties.  If you say what the price is, I could work out the SDLT to see if it matches what your solicitor says.

I would not expect you to have to pay SDLT on the remortgage of House B, unless its underlying ownership is also changing.

We are paying £228k for House A

Snookie12cat

warwick2001 said:

Thanks to both replies. 

I was sure I'd have to pay 2 lots of stamp duty as I assumed since I was paying it on House A, and as House B is now our 2nd home I'd be paying SD on that one as well.

Happy days!!!!

Only happy days if you already know and calculated the extra stamp duty for house A... If not, you could be in for a shock.

warwick2001

The solicitor has calculated it, not me. They say its £2060

SDLT_Geek

warwick2001 said:

SDLT_Geek said:

warwick2001 said:

Afternoon all,

Just got a question for you knowledgeable folk.

We are in the process of buying a house for us to live in (£182k mortgage). House A

Our current house is being remortgaged with a BTL mortgage (£85k BLT mortgage). House B

We have just received our completion certificate from our solicitor, and there appears to be only 1 stamp duty payment, and it appears to be attached to House A.

I have read that "Stamp Duty Land Tax is not payable unless there is a need to transfer the legal title of your home as part of the remortgage transaction". And technically this is the case, we are not changing the legal title. However, I am positive I should be paying 2 lots of stamp duty on the purchase/re-mortgage as we will have 2 houses, House A is our home, House B will be rented out.

Can anyone advise please.

Many thanks

I would expect you to pay SDLT only on the property you are buying, House A, but with the extra 3% for additional properties.  If you say what the price is, I could work out the SDLT to see if it matches what your solicitor says.

I would not expect you to have to pay SDLT on the remortgage of House B, unless its underlying ownership is also changing.

We are paying £228k for House A

The SDLT on House A with the extra 3% on a price of £228K comes to £8,900.  Is that what the solicitor said?

warwick2001

SDLT_Geek said:

warwick2001 said:

SDLT_Geek said:

warwick2001 said:

Afternoon all,

Just got a question for you knowledgeable folk.

We are in the process of buying a house for us to live in (£182k mortgage). House A

Our current house is being remortgaged with a BTL mortgage (£85k BLT mortgage). House B

We have just received our completion certificate from our solicitor, and there appears to be only 1 stamp duty payment, and it appears to be attached to House A.

I have read that "Stamp Duty Land Tax is not payable unless there is a need to transfer the legal title of your home as part of the remortgage transaction". And technically this is the case, we are not changing the legal title. However, I am positive I should be paying 2 lots of stamp duty on the purchase/re-mortgage as we will have 2 houses, House A is our home, House B will be rented out.

Can anyone advise please.

Many thanks

I would expect you to pay SDLT only on the property you are buying, House A, but with the extra 3% for additional properties.  If you say what the price is, I could work out the SDLT to see if it matches what your solicitor says.

I would not expect you to have to pay SDLT on the remortgage of House B, unless its underlying ownership is also changing.

We are paying £228k for House A

The SDLT on House A with the extra 3% on a price of £228K comes to £8,900.  Is that what the solicitor said?

The solicitor has quoted £2,060 for the Stamp Duty. Please could you show how you got to £8,900, thanks

SDLT_Geek

warwick2001 said:

SDLT_Geek said:

warwick2001 said:

SDLT_Geek said:

warwick2001 said:

Afternoon all,

Just got a question for you knowledgeable folk.

We are in the process of buying a house for us to live in (£182k mortgage). House A

Our current house is being remortgaged with a BTL mortgage (£85k BLT mortgage). House B

We have just received our completion certificate from our solicitor, and there appears to be only 1 stamp duty payment, and it appears to be attached to House A.

I have read that "Stamp Duty Land Tax is not payable unless there is a need to transfer the legal title of your home as part of the remortgage transaction". And technically this is the case, we are not changing the legal title. However, I am positive I should be paying 2 lots of stamp duty on the purchase/re-mortgage as we will have 2 houses, House A is our home, House B will be rented out.

Can anyone advise please.

Many thanks

I would expect you to pay SDLT only on the property you are buying, House A, but with the extra 3% for additional properties.  If you say what the price is, I could work out the SDLT to see if it matches what your solicitor says.

I would not expect you to have to pay SDLT on the remortgage of House B, unless its underlying ownership is also changing.

We are paying £228k for House A

The SDLT on House A with the extra 3% on a price of £228K comes to £8,900.  Is that what the solicitor said?

The solicitor has quoted £2,060 for the Stamp Duty. Please could you show how you got to £8,900, thanks

£2,060 is the correct amount on £228K without the 3% extra.  3% of £228K is another £6,840.  Adding that to £2,060 gives £8,900 which is the amount of SDLT you should pay.

Snookie12cat

3% extra is England, if you are in Wales it's 4% extra. 
Double check with your solicitor and make sure they know they are buying a second home.
Last thing you want is a late payment bill for incorrect tax from HMRC.