Main Residence & Higher Rate Stamp Duty

King_Slayer

My husband and I own two buy to let properties (as individuals not Ltd company). The first we lived in for roughly 6 years and changed to a Buy to Let mortgage, due to an out of area work move and currently live in rented accommodation.

The second we purchased at the end of last year as a Buy to let and paid Higher rate stamp duty.

We are now in the process of buying a new home due to another work move later this year.

As we don’t currently own a main residence, will we be required to pay the Higher Stamp duty? 

Or will we still be required to pay the Higher rate because we previously lived in the first buy to let (as a main residence) and this hasn’t been sold. 

Is it possible that as these 2 are buy to let mortgages on both and we will only have the one residence (new purchase), that we may not be required to pay the higher stamp duty. 

user1977

King_Slayer said:

Is it possible that as these 2 are buy to let mortgages on both and we will only have the one residence (new purchase), that we may not be required to pay the higher stamp duty. 

No, other than the exemption for replacing your main residence, it doesn't really matter what you're using the properties for. You'll be increasing the number of properties you own, so you will need to pay the higher rate on the purchase.

SDLT_Geek

King_Slayer said:

My husband and I own two buy to let properties (as individuals not Ltd company). The first we lived in for roughly 6 years and changed to a Buy to Let mortgage, due to an out of area work move and currently live in rented accommodation.

The second we purchased at the end of last year as a Buy to let and paid Higher rate stamp duty.

We are now in the process of buying a new home due to another work move later this year.

As we don’t currently own a main residence, will we be required to pay the Higher Stamp duty? 

Or will we still be required to pay the Higher rate because we previously lived in the first buy to let (as a main residence) and this hasn’t been sold. 

Is it possible that as these 2 are buy to let mortgages on both and we will only have the one residence (new purchase), that we may not be required to pay the higher stamp duty. 

Are you proposing to buy in England?  If so, the relevant stamp duty is stamp duty land tax.

From what you say, the extra SDLT will apply.  It is presently 3%, but might increase in the Budget on 15 March 2023 (it is an extra 6% in Scotland).

bobster2

King_Slayer said:

My husband and I own two buy to let properties (as individuals not Ltd company). The first we lived in for roughly 6 years and changed to a Buy to Let mortgage, due to an out of area work move and currently live in rented accommodation.

The second we purchased at the end of last year as a Buy to let and paid Higher rate stamp duty.

We are now in the process of buying a new home due to another work move later this year.

As we don’t currently own a main residence, will we be required to pay the Higher Stamp duty? 

Or will we still be required to pay the Higher rate because we previously lived in the first buy to let (as a main residence) and this hasn’t been sold. 

Is it possible that as these 2 are buy to let mortgages on both and we will only have the one residence (new purchase), that we may not be required to pay the higher stamp duty. 

The first two questions here cover your situation...

https://uklandlordtax.co.uk/stamp-duty-faqs/ 

I am purchasing a new main residence but intend to retain my current main residence, convert the mortgage to a buy-to-let mortgage and rent it out. Will I have to pay the higher rates of SDLT on the purchase of my new main residence?
Yes, the higher rates will apply as following the purchase you will own an additional rental property. However, if you sell your previous home within 3 years of the purchase of the new one you will be able to claim a refund from HMRC.

I currently live in rented accommodation but own a property that is rented out. I am now looking to purchase my first home, for me and my family to live in. Will I have to pay the higher rates of SDLT on the purchase of my main residence?
Yes, the higher rates of SDLT will apply as following the purchase you will own an additional residential property (and will not have replaced your main residence, i.e. sold a current main residence and purchased a new one).