Stamp Duty on second home that isn’t a second home!

Henrym88

Hi all,

I'm currently in the process of buying a property to live in, but have a slightly complicated Stamp Duty question I was hoping you might be able to answer.

I currently own half of a buy-to-let property with an ex-partner that, in due course, I will be selling my share in - either with the whole house sold or my share sold to her. I have never lived in the property and it was a cash purchase so there is no mortgage on it.

This sale will not be done by the time I hope to complete on the house purchase, and I'm just wondering whether I'll have to pay the large stamp duty charge on the purchase price of £525,000.

The rate listed is £29,500 at the high rate or £13,750 at the lower rate.

Any guidance would be greatly appreciated!

user1977

The short answer is yes, you’re increasing the number of properties you own so the higher rate will apply.

Keep_pedalling

But you can claim it back if you dispose of the BTL within 3 years. 

user1977

Keep_pedalling said:

But you can claim it back if you dispose of the BTL within 3 years. 

On what basis? We know it isn't replacing a main residence because the OP has told us they've never lived there.

Keep_pedalling

user1977 said:

Keep_pedalling said:

But you can claim it back if you dispose of the BTL within 3 years. 

On what basis? We know it isn't replacing a main residence because the OP has told us they've never lived there.

Whoops! Senior moment (again).

propertyrental

Where fo you live at present?

If you own the property where you currently live, and are either selling it at the same time as buying the new property, or will sell it within 3 years (pay SDLT now but reclaim later), then there is no additional SDLT to pay.

But owning a BTL property and increasing the number of properties owned from 1 to 2 will involve additional SDLT. Selling the BTL later will not help.

The only way to avoid the additional SDLT is to sell the BTL before Completing on your purchase.

SDLT_Geek

Henrym88 said:

Hi all,

I'm currently in the process of buying a property to live in, but have a slightly complicated Stamp Duty question I was hoping you might be able to answer.

I currently own half of a buy-to-let property with an ex-partner that, in due course, I will be selling my share in - either with the whole house sold or my share sold to her. I have never lived in the property and it was a cash purchase so there is no mortgage on it.

This sale will not be done by the time I hope to complete on the house purchase, and I'm just wondering whether I'll have to pay the large stamp duty charge on the purchase price of £525,000.

The rate listed is £29,500 at the high rate or £13,750 at the lower rate.

Any guidance would be greatly appreciated!

Is the property you are buying in England, so the relevant stamp duty is stamp duty land tax?

As others have suggested, the key point is whether there is another property which has been sold / disposed of and which you lived in as your only or main residence within the last three years?

Failing that, the extra 3% SDLT will apply if you still have a share in the BTL property.  It would not later be recoverable by virtue of a sale of the BTL property, or of your interest in it.