Buying a Second Home - Stamp Duty

D2007

Hi,

Ive got a second home stamp duty question that hopefully someone can answer.

I'm in the fortunate position where my current residence is mortgage free. It's a family home with my extended family living with me.

I'm looking at purchasing a second home for my immediate family (partner plus kids) leaving the current home to my remaining family (parents/siblings). I won't be able to afford a big enough home in the location I want to buy in next for all of us (good primary schools area). The current home will just be kept as long as my parents are around so they don't have to move out etc.

I'm aware I will need to pay stamp duty at the second home rate, which is fair enough. However my intention is to only be in the second home for 2-3 years and then sell up and buy an alternative home (for good secondary school encatchment, life long home).

Will I need to pay the second home stamp duty twice or will me disposing of my second home (primary residence) for another second home (primary residence) mean I am exempt? 

Struggling to find out what happens with this scenario in relation to second home stamp duty rates when it's being replaced with another "second home". One will have to be sold to have funds to purchase the next so no chance of overlapping.

Thanks in advance for any additional information on this scenario.

anselld

If you are replacing your main residence you would not pay the surcharge, ie the second purchase.
When you say "leaving" the first home to parents and siblings if you mean actually transferring ownership then you would not pay the surcharge on the first purchase either.

D2007

Thanks Anselld - greatly appreciate the quick response. Good to know I will only need to pay once.

The first home would remain in my name, it would just be left as a long term investment. Unlikely to sell in the next 3 years so fully planned to pay the additional stamp duty on this purchase.

anselld said:

If you are replacing your main residence you would not pay the surcharge, ie the second purchase.
When you say "leaving" the first home to parents and siblings if you mean actually transferring ownership then you would not pay the surcharge on the first purchase either.

TheJP

Also do you understand what being a landlord entails?

D2007

TheJP said:

Also do you understand what being a landlord entails?

I won't be charging rent. Parents/Siblings will just cover maintenance and bills. So not looking to be their landlord as such.

Slithery

D2007 said:

TheJP said:

Also do you understand what being a landlord entails?

I won't be charging rent. Parents/Siblings will just cover maintenance and bills. So not looking to be their landlord as such.

If they are paying for maintenance than that is classed as 'rent in kind' so legally you will be a landlord and have to comply with all of the various laws, regulations and taxes the same as any other landlord.