Stamp Duty on replacing main home when you own buy-to-lets

RainbowsInTheSpray

I'm not sure but I believe my solicitor may be telling me a load of nonsense.

Can anyone here confirm for certain what google searches seem to show, namely that an owner of buy-to-lets only pays the standard rate of Stamp Duty if simply selling one 'principal private residence' and replacing it with another... i.e. moving home!? This will be a standard house move, completions happening at the same time.

He's telling me that ownership of buy-to-lets will probably affect my move and that I'll have to pay a 3% surcharge, if you please. My investigations seem to indicate otherwise.

p00hsticks

Assuming we're talking England here then I believe you are right and your solicitor is wrong. 

From:
Higher rates of Stamp Duty Land Tax - GOV.UK (www.gov.uk)

You must pay the higher Stamp Duty Land Tax (SDLT) rates when you buy a residential property (or a part of one) for £40,000 or more, if all the following apply:

• it will not be the only residential property worth £40,000 or more that you own (or part own) anywhere in the world
• you have not sold or given away your previous main home
• no one else has a lease on it which has more than 21 years left to run

The second bullet point does not apply if you are replacing you main residence, and all have to for the higher rate to apply

sheramber

If you buy  before you sell you will pay the additional stamp duty but can reclaim it if you sell your original main residence within 3 years

allconnected

Get your solicitor  to read HMRC’s guidance in the Stamp Duty Land Tax manual at 

SDLTM09800

Which makes it very clear.

Allconnected.

Cathfergie

Hi
I'm interested in what was the outcome of your stamp duty enquiry. I think your solicitor was wrong, but I'd like to know for sure as I was asked this yesterday as my friend's mortgage advisor has told her they'll pay the higher rate when they sell and buy their main residence as her husband has a buy to let. Sounds wrong to me. 

RainbowsInTheSpray

Yes, he was wrong but it seems to be a fairly widespread misunderstanding among conveyancing solicitors... which, if you think about it, is quite a serious condemnation of their professionalism.

You have to keep it quite simple and make sure that the legally stipulated owner(s) move(s) from the old house to the new house, ideally on the same day.. No temporary lodging in any buy-to-let or suchlike! That way the taxman seems to be happy.

Cathfergie

That's brilliant, as you say worrying about the level of professionalism, my friend was convinced the mortgage advisor was right. Thank You 😊