Stamp duty claim on main house

Russyarnold

I have a question on claiming stamp duty for main residence.

Long story short, I recently ( a month ago) bought a home for £460k and paid £25k stamp duty as I am still in possession of my first home that now I am looking to sell. The first house (still mortgaged and empty since last month I moved to my new home)was used by me as a family first home and now thinking of selling it. 
When I sell my first home, would I get a refund from £25k stamp duty I paid for my second home. Bear in mind, first home was never let. Was just lived by my selves. I can support double mortgage and council taxes only for few months and really needs monies now.
Thanks, 
Russy.

propertyrental

You claim back the 3% second property element of the stamp duty (if in England).

Your solicitor at the time really should have explained this to you.

Claiming back is not that hard, or for £50 or so your solicitor will do the forms.

https://www.gov.uk/government/publications/stamp-duty-land-tax-apply-for-a-repayment-of-the-higher-rates-for-additional-properties

Scotbot

You can claim back £13,800 which is the additional 3% provided you sell the 1st house within 3 years and don't rent it out before you sell it

Russyarnold

Scotbot said:

You can claim back £13,800 which is the additional 3% provided you sell the 1st house within 3 years and don't rent it out before you sell it

Thanks a bunch.
That really helps me with calculation. 
Property was never let. It's been empty (since I moved out)and will be until it's sold.

Russyarnold

Also, anyone knows if I need to pay capital gains?
As I understand I don't have to as it was my only and main residence.

SDLT_Geek

Russyarnold said:

I have a question on claiming stamp duty for main residence.

Long story short, I recently ( a month ago) bought a home for £460k and paid £25k stamp duty as I am still in possession of my first home that now I am looking to sell. The first house (still mortgaged and empty since last month I moved to my new home)was used by me as a family first home and now thinking of selling it. 
When I sell my first home, would I get a refund from £25k stamp duty I paid for my second home. Bear in mind, first home was never let. Was just lived by my selves. I can support double mortgage and council taxes only for few months and really needs monies now.
Thanks, 
Russy.

Assuming you bought in England, then the relevant stamp duty is stamp duty land tax.

The SDLT on a £460K purchase of your new home would have been £24,300, of which £13,800 is the extra 3%.  It is that extra 3% which can be claimed back when you complete the sale of your old home, if you meet all of the four conditions for the "replacement exception" outlined in the bottom half of the guidance here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800.

Russyarnold

Also, anyone knows if I need to pay capital gains?

As I understand I don't have to as it was my only and main residence.

propertyrental

probably not but depends when you sell and what you do with it in the meantime.

silvercar

Russyarnold said:

Also, anyone knows if I need to pay capital gains?

As I understand I don't have to as it was my only and main residence.

From when it ceased to be your main residence, you no longer get primary residence relief, but you do get the last 9 months of ownership and each owner does have a £3,000 CGT allowance, if not used elsewhere.

So sell it within 9 months of moving out and you are fine, any longer and you need to do a calculation. You are allowed buying and selling costs and any major improvements.

Russyarnold

silvercar said:

Russyarnold said:

Also, anyone knows if I need to pay capital gains?

As I understand I don't have to as it was my only and main residence.

From when it ceased to be your main residence, you no longer get primary residence relief, but you do get the last 9 months of ownership and each owner does have a £3,000 CGT allowance, if not used elsewhere.

So sell it within 9 months of moving out and you are fine, any longer and you need to do a calculation. You are allowed buying and selling costs and any major improvements.

Thanks. Didn't know about this.

House is located in a popular area and going on to the market next week. Hope to complete by end of this year. Fingers crossed

Bookworm105

Russyarnold said:

Also, anyone knows if I need to pay capital gains?

As I understand I don't have to as it was my only and main residence.

no, that is not technically correct. You became liable for CGT from the moment it ceased to be your main home, BUT to allow for precisely the situation where it takes time to sell the old main home, CGT rules allow full relief ("exemption") for up to a further 9 Months of your legal ownership after you move out.

Does not matter if you let the property in those 9 months or not, you will always get full relief for up to a further 9 months provided it was once your main home. Obviously those 9 months do not overlap, the clock starts from when it ceased to be the main home, so if sold in less than 9 months you only get the actual extra months, ie no overlapping period.

If you have still not sold after 9 months then CGT liability arises on the amount of gain less the amount of relief you get for when it was your main home. ("sold" is the date you exchange contracts with your purchaser, not the date of completion, unless your contract had some unusual conditions in it deferring actual ownership until completion date)

CGT arises for each owner based on their share, so, for example, if 50/50 ownership, each person does the following calculation on their share of the property

Actual selling price - actual (original) purchase price - buying and selling costs paid personally (eg legal fees and EA commission) = GROSS Gain

Main home relief = (number of months it was your main home + (up to) final 9 months) / total ownership period in months = a %

Gross gain - (gross gain x %) =  NET gain 

TAXABLE gain = net - CGT personal allowance (currently £3k)

You have to be living in a massively buoyant property market to end up having to pay any CGT at all unless it takes many years to sell, especially if there is >1 owner.