Additional Dwelling Supplement - Scotland

acm21

Hello, 

I am looking for clarity on a specific situation with Additional Dwelling Supplement in Scotland. I currently own a buy-to-let but have found myself 'homeless'. So, I'm looking to buy myself somewhere as my main residence as I don't currently have one. My assumption is that I will pay the 4% Additional Dwelling Supplement on whatever new property I purchase.

I would like to clarify that if I sell my BUY TO LET property within the stated 18 months that I would in fact receive the 4% back even if this property was not my main residence at the time of the new main residence purchase. 

Any help would be greatly received. 

thanks
Andie

Snookie12cat

acm21 said:

Hello, 

I am looking for clarity on a specific situation with Additional Dwelling Supplement in Scotland. I currently own a buy-to-let but have found myself 'homeless'. So, I'm looking to buy myself somewhere as my main residence as I don't currently have one. My assumption is that I will pay the 4% Additional Dwelling Supplement on whatever new property I purchase.

I would like to clarify that if I sell my BUY TO LET property within the stated 18 months that I would in fact receive the 4% back even if this property was not my main residence at the time of the new main residence purchase. 

Any help would be greatly received. 

thanks
Andie

I believe if you have lived in the BTL as your main residence in the last 18m you can claim it back if you sell it (within the 18m). If you have not, then there is no rebate. 

The 4% extra would be due and non refundable unless you sold the BTL first.

acm21

Snookie12cat said:

acm21 said:

Hello, 

I am looking for clarity on a specific situation with Additional Dwelling Supplement in Scotland. I currently own a buy-to-let but have found myself 'homeless'. So, I'm looking to buy myself somewhere as my main residence as I don't currently have one. My assumption is that I will pay the 4% Additional Dwelling Supplement on whatever new property I purchase.

I would like to clarify that if I sell my BUY TO LET property within the stated 18 months that I would in fact receive the 4% back even if this property was not my main residence at the time of the new main residence purchase. 

Any help would be greatly received. 

thanks
Andie

I believe if you have lived in the BTL as your main residence in the last 18m you can claim it back if you sell it (within the 18m). If you have not, then there is no rebate. 

The 4% extra would be due and non refundable unless you sold the BTL first.

This was my worry reading between the lines, do you think there is scope to 'live' in both properties once my tenant has seen out their notice? 

theartfullodger

That would depend on the tax laws applying when you actually sell: Until then, any answer will be a guess, sorry.  There are a lot of huge bills to be paid - Covid, Ukraine, Cost of leaving, Bre**it etc etc etc - so I'm expecting taxes to keep going up, yes even more than Rishi has already increased them. 

Re "Homeless", where are you currently sleeping them please?

You'll appreciate currently all Scottish tenancy notices are discretionary, and SaL inform me that is probably going to continue after April 1st so don; assume you'll get possession back if you apply to the tribunal.

Artful: Likewise Scottish landlord.

NB You are not, IIRC, anyway legally "homeless" at present as you own a property  - appreciate it's currently let to someone else.

acm21

theartfullodger said:

That would depend on the tax laws applying when you actually sell: Until then, any answer will be a guess, sorry.  There are a lot of huge bills to be paid - Covid, Ukraine, Cost of leaving, Bre**it etc etc etc - so I'm expecting taxes to keep going up, yes even more than Rishi has already increased them. 

Re "Homeless", where are you currently sleeping them please?

You'll appreciate currently all Scottish tenancy notices are discretionary, and SaL inform me that is probably going to continue after April 1st so don; assume you'll get possession back if you apply to the tribunal.

Artful: Likewise Scottish landlord.

NB You are not, IIRC, anyway legally "homeless" at present as you own a property  - appreciate it's currently let to someone else.

My use of inverted commas around the word homeless was to indicate I do own property and I realise I am fortunate to do so. I am living with family but this is a very short-term solution, however knowing that having a sitting tenant is not an easy thing to navigate. Although initial talks have gone well and I will serve notice shortly to try and move things along. 

I'm aware tax rates change, but for this example, if only wanted to understand more about the wording of the purchase of a main residence against owning a buy to let. 

Snookie12cat

acm21 said:

Snookie12cat said:

acm21 said:

Hello, 

I am looking for clarity on a specific situation with Additional Dwelling Supplement in Scotland. I currently own a buy-to-let but have found myself 'homeless'. So, I'm looking to buy myself somewhere as my main residence as I don't currently have one. My assumption is that I will pay the 4% Additional Dwelling Supplement on whatever new property I purchase.

I would like to clarify that if I sell my BUY TO LET property within the stated 18 months that I would in fact receive the 4% back even if this property was not my main residence at the time of the new main residence purchase. 

Any help would be greatly received. 

thanks
Andie

I believe if you have lived in the BTL as your main residence in the last 18m you can claim it back if you sell it (within the 18m). If you have not, then there is no rebate. 

The 4% extra would be due and non refundable unless you sold the BTL first.

This was my worry reading between the lines, do you think there is scope to 'live' in both properties once my tenant has seen out their notice? 

I would be very surprised as I imagine they would get lots of people trying it. 
I imagine you need to show evidence you lived in it prior to the purchase of the new one. 

acm21

Snookie12cat said:

acm21 said:

Snookie12cat said:

acm21 said:

Hello, 

I am looking for clarity on a specific situation with Additional Dwelling Supplement in Scotland. I currently own a buy-to-let but have found myself 'homeless'. So, I'm looking to buy myself somewhere as my main residence as I don't currently have one. My assumption is that I will pay the 4% Additional Dwelling Supplement on whatever new property I purchase.

I would like to clarify that if I sell my BUY TO LET property within the stated 18 months that I would in fact receive the 4% back even if this property was not my main residence at the time of the new main residence purchase. 

Any help would be greatly received. 

thanks
Andie

I believe if you have lived in the BTL as your main residence in the last 18m you can claim it back if you sell it (within the 18m). If you have not, then there is no rebate. 

The 4% extra would be due and non refundable unless you sold the BTL first.

This was my worry reading between the lines, do you think there is scope to 'live' in both properties once my tenant has seen out their notice? 

I would be very surprised as I imagine they would get lots of people trying it. 
I imagine you need to show evidence you lived in it prior to the purchase of the new one. 

I would agree, thanks for your input 

user1977

acm21 said:

Snookie12cat said:

acm21 said:

Hello, 

I am looking for clarity on a specific situation with Additional Dwelling Supplement in Scotland. I currently own a buy-to-let but have found myself 'homeless'. So, I'm looking to buy myself somewhere as my main residence as I don't currently have one. My assumption is that I will pay the 4% Additional Dwelling Supplement on whatever new property I purchase.

I would like to clarify that if I sell my BUY TO LET property within the stated 18 months that I would in fact receive the 4% back even if this property was not my main residence at the time of the new main residence purchase. 

Any help would be greatly received. 

thanks
Andie

I believe if you have lived in the BTL as your main residence in the last 18m you can claim it back if you sell it (within the 18m). If you have not, then there is no rebate. 

The 4% extra would be due and non refundable unless you sold the BTL first.

This was my worry reading between the lines, do you think there is scope to 'live' in both properties once my tenant has seen out their notice? 

No, I think it needs to be your principal residence - you can't have two of those simultaneously, and "living" in one temporarily for tax purposes ain't going to count.

acm21

I thought it best just to ask my lawyer, their response:

No ADS is only refundable on where the property is your main residence and you are replacing your main residence within 18 months and is not applicable to Buy to Let properties.

So unless I sell the buy to let flat first there is no way around the 4% tax, not the news I was after 😩

theartfullodger

Presumably you've been making a profit from renting and the B2L will sell for more than you paid for it?

acm21

theartfullodger said:

Presumably you've been making a profit from renting and the B2L will sell for more than you paid for it?

Yes I hope so, although ex-local authority so won't match the crazy high prices that most of the Scottish property market is seeing but enough to recoup the 4%