rent out my main residence

J41721

Hi

I am in rental and I just completed a property transaction and had declared it as my main residence replacement for stamp duty purpose

Could I rent it out as my fixed rental contract had another year and only finished next year in May.  

Does it make financial sense as I am a high earner and pay 40% tax ?
What other things should I consider?

Thank you
J

MaryNB

Do you have a mortgage on it? If so you cannot let it under the terms of your mortgage unless you get a consent to let. I would be surprised if a bank gave you a consent to let at the very start of your residential mortgage term. 

How much do you know about the rules and responsibilities of being a landlord? If you want your property back after a year you'll have to get everything right. For an S21 to be valid there are a long list of requirements. Miss anything on that list and it will be invalid and a court wont grant you possession if the tenants don't want to move out.

From the sticky at the top of this forum.

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information


I don't know about the SDLT implications but sounds like tax evasion if you had no intention of living in it right away.

theartfullodger

J41721 said:

Hi

I am in rental and I just completed a property transaction and had declared it as my main residence replacement for stamp duty purpose
....

Sounds then like it's not your main residence, for stamp duty or anything else.  

Or have I misunderstood, please??

J41721

for context, I sold my main residence last year and relocated and had been trying to buy a house.

The house chain fell apart and that's why I signed another fixed term rental but then suddenly it was moving and completed.

canaldumidi

Unless you make the new property your main residence you ill be commiting tax fraud as SDLT is due.

Assuming no mortgage, you could rent it out, but then may be liale for Captal Gains Tax when sold.

kingstreet

How many properties did you own before and do you own now?

Olinda99

You can rent out your main residence if you want - in fact, many people do (eg posted abroad, etc)

The only proviso is if you have a mortgage etc on the property then see what the mortgage company T&C say - the mortgage company many or may not let you, or may charge higher rates. 

Nominating it for main residence is purely for CGT purposes and has no effect on your being able to rent it out or not.

As to whether it makes financial sense only you can decide - you will get some (taxed) income, and not have to pay council tax, utilities etc.

p00hsticks

Olinda99 said:

Nominating it for main residence is purely for CGT purposes and has no effect on your being able to rent it out or not.

As the OP has mentined, it will also determine whether the SDLT surcharge should be paid.

user1977

p00hsticks said:

Olinda99 said:

Nominating it for main residence is purely for CGT purposes and has no effect on your being able to rent it out or not.

As the OP has mentined, it will also determine whether the SDLT surcharge should be paid.

I think the relevance is actually whether it qualifies for the first time buyer concession (which you only get if you are buying with the intention of it being your main residence). Otherwise it is liable for SDLT at normal rates (and you can't then use the FTB concession for any subsequent purchase).

J41721

kingstreet said:

How many properties did you own before and do you own now?

I sold my main residence with my hubby in 2021.  Relocated and in a rental.
I co-own a council house via share ownership with my mum but I have moved out since 2009.  My mum is still living there.

I bought a house intended to live in it.  But

- I have a fixed rental contract , and the rental is better in location for me at least this year for work/school run reason (being called back to office)
- I intend to move into the new house 2023 summer when my fixed rental contract is completed
- the house hasn't been updated in
30 years and builders had a huge backlog and could only start work in Feb2023.  They told me even they could start there is shortage of material and I would need to wait a few months.
So I am thinking rent out in a short period , e.g. 9 months (?) to cover some bills, then do a little update and move in 

user1977

So you're not a first time buyer, and don't own any other properties? Not sure what the stamp duty point is then, as it sounds like it should just be chargeable at normal rates whether you're going to be renting it out or not?