Stamp Duty Question on replacement main home

FaceAche62

Hello, I live in a flat on a crumbling cliff - at some point it will be uninhabitable and it won't be possible to sell it so I am looking to buy a second property to become my main home. I am assuming that because it's a second home I will still have to pay stamp duty despite the circumstances as I need to buy before it disappears. Is there any way round this? 

Bigphil1474

I believe you have up to 3 years to 'sell' your old home in which you can reclaim the SDLT. You do have to pay it first though. Is there any insurance company involved who could assist?

_Penny_Dreadful

FaceAche62 said:

Hello, I live in a flat on a crumbling cliff - at some point it will be uninhabitable and it won't be possible to sell it so I am looking to buy a second property to become my main home. I am assuming that because it's a second home I will still have to pay stamp duty despite the circumstances as I need to buy before it disappears. Is there any way round this? 

For the higher rate of SDLT to apply on the purchase 4 conditions need to be met. If the value of your current home is effectively zero then I don’t think you’ll meet condition C, therefore the higher rate of SDLT would not be due. 

Condition C - the purchaser owns a major interest (with a market value of £40,000 or more) in another dwelling which is not subject to a lease which has more than 21 years to run at the date of purchase of the new dwelling. 

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09765

user1977

FaceAche62 said:

at some point it will be uninhabitable and it won't be possible to sell it

When is that likely to be? Presumably it isn't unsellable at the moment (even if the market would be limited)?

What is the exit plan, as you'd still have a (presumably leasehold) interest in the airspace even if the building disappears? Surrending your lease to the freeholder would also be "disposal" for SDLT purposes.

FaceAche62

Thanks for the responses. I own a share of the freehold. It's hard to predict when the flat will become uninhabitable. Hopefully not in the next 10 years but could be in 15. There's no insurance against cliff erosion. It isn't unsellable at the moment but I would like to stay in the flat as long as possible but I am 62 and need to ensure I have a plan B as wouldn't want to deal with being homeless in my 70s or 80s.

user1977

The rules may of course all be quite different by that time.

_Penny_Dreadful

FaceAche62 said:

Thanks for the responses. I own a share of the freehold. It's hard to predict when the flat will become uninhabitable. Hopefully not in the next 10 years but could be in 15. There's no insurance against cliff erosion. It isn't unsellable at the moment but I would like to stay in the flat as long as possible but I am 62 and need to ensure I have a plan B as wouldn't want to deal with being homeless in my 70s or 80s.

You say it’s not unsellable at the moment but I’d be surprised if anyone could get a mortgage to buy it leaving you with cash buyers only. I guess you could get lucky with some unsuspecting Homes Under the Hammer novice buyer.