Stamp Duty Surcharge

Cameron1590_2
Cameron1590_2 Posts: 183
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edited 31 October 2023 at 2:13PM in Cutting tax
Hello,

Currently we have our “main residence” (England) that we are selling (moving home) and a holiday let that was inherited which is in Wales.

Do we have to pay the additional Stamp Duty surcharge on our new home?

The holiday let is ran solely as a business, we never use the property and it is registered for business rates. 

Looking online it’s all a little grey, some sites say you would have to pay the additional rate. Others say you won’t. 

Any advice appreciated. 

Thanks,

C

Comments

  • Jeremy535897
    Jeremy535897 Posts: 10,385
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    A furnished holiday let is a dwelling for SDLT purposes, according to HMRC. You should get the higher rate back if you sell your current house in time. See:
    https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property
  • sheramber
    sheramber Posts: 18,657
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    If you are replacing your main home then you do not pay the additional rate of stamp duty if you are replacing your main residence, which you say you are.

    See second bullet point below.

    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
  • Jeremy535897
    Jeremy535897 Posts: 10,385
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    sheramber said:
    If you are replacing your main home then you do not pay the additional rate of stamp duty if you are replacing your main residence, which you say you are.

    See second bullet point below.

    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 Welsh holiday home means the first condition is not met.
  • sheramber
    sheramber Posts: 18,657
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    But the second condition is not met as the OP is selling the old main residence ,

    ALL conditions have to be  met for the higher rate to be payable,

    If the old main residence is not sold before the new one is bought then the higher rate will be due but can be  reclaimed if the old one is sold within 3 years.
  • Are you selling your old main residence before, or at the same time, as you’re buying your new main residence?

    Then you won’t pay the extra 3% SDLT.

    Are you selling your old main residence after you’ve bought your new main residence?

    Then you will pay the additional 3% but can claim it back if you. sell your old main residence within 3 years of buying the new main residence.

    This is assuming the same circumstances  apply to both (or all) the owners of all three properties. It can get a  bit complicated if, say, you aren’t married (or civil partners)  and you weren’t both owners of the old main residence but buy the new one jointly. The guidance quoted above is quite simplistic and doesn’t cover all circumstances.

    and yes, a holiday let is a residential property for SDLT purposes.


  • Are you selling your old main residence before, or at the same time, as you’re buying your new main residence?

    Then you won’t pay the extra 3% SDLT.

    Are you selling your old main residence after you’ve bought your new main residence?

    Then you will pay the additional 3% but can claim it back if you. sell your old main residence within 3 years of buying the new main residence.

    This is assuming the same circumstances  apply to both (or all) the owners of all three properties. It can get a  bit complicated if, say, you aren’t married (or civil partners)  and you weren’t both owners of the old main residence but buy the new one jointly. The guidance quoted above is quite simplistic and doesn’t cover all circumstances.

    and yes, a holiday let is a residential property for SDLT purposes.


    Hello,

    Yes, we are selling our current main residence at the same time as buying our new main residence. (Both the sale and purchase will complete on the same day). 

    So based on that, it appears the surcharge won’t apply……phew! As we had budgeted the £12k SDLT on the new place, but not the £20k~ odd if the surcharged had applied. 

    Panic over. 

    Thanks 
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