Own a house but want to move in with partner - what to do?

phantastico

I've been with my partner for several years now.  I own my own home, whilst he has job-related accommodation nearby (because of the nature of his work, he's always lived in houses provided on site as part of his pay package; he doesn't own his own).  I want to move in with him at long last and sell my own place, which for various reasons I'd prefer not to keep and rent out.

However, if I do sell, I want to buy something else to give us somewhere to eventually live.  Neither of us are big earners and I worry that being off the property ladder would mean we'd never get back on it again.  But capital gains tax is a huge pitfall, as any new house wouldn't be my main residence.  The job-related accommodation exemption doesn't apply as we're not married or in a civil partnership.

It seems my options are:

• buy another house locally and rent it out - suck up the CGT
• buy a holiday let, either locally or in Wales where I have a lot of family and visit regularly anyway

What would be the best thing to do to keep myself financially on an even keel?  I'm not interested in this as a business venture - I'm uncomfortable with the principal of buy-to-let and second homes as it is - I just don't want to end up substantially worse off in the long-run because of our circumstances.

Thanks in advance

cymruchris

My understanding - but happy to be corrected (as I'm not an expert) - the house you are selling is subject to capital gains tax if it's not your main residence - which it is - so no capital gains tax to pay there. The new house would only be subject to capital gains tax if you sold it at a later date, and hadn't been living there as your primary residence, which from what you've said you're not planning to do. Or are you thinking to sell the buy to let property again before buying another house of your own to live in even further down the line?

Hoenir

Do you currently have a mortgage? 

ChasingtheWelshdream

As a Welsh resident, do be aware that some councils are clamping down on holiday lets, and/or imposing premiums. Our own council charge a 75% council tax premium.  

There are exemptions but do check it out first. 

phantastico

Hoenir said:

Do you currently have a mortgage? 

A small one, but nearly paid off

phantastico

cymruchris said:
Or are you thinking to sell the buy to let property again before buying another house of your own to live in even further down the line?

Yes, the latter - buy something now, then sell it to purchase a house for us in the future. The reason for that is that we’re not sure what’ll happen in the future with jobs, where we’ll want it need to live

lincroft1710

Do you really want to become a landlord?

Albermarle

Not sure of your time scales but it might be better to save or invest the money. It will certainly be a lot simpler and a lot less hassle.
You can save 100% safely with a 5 year fixed term savings account or 5 year fixed term ISA, paying over 4%.
If your time scale was over 10 years, a regular medium risk investments fund would have a good chance of making a higher return than that, with only a small risk of any losses.
Or you could do both.

phantastico

lincroft1710 said:

Do you really want to become a landlord?

In all honesty, no, I don't.  I thought about doing it with my current house, but I'd need to spend a fortune to get it up to scratch for the rental market and I don't think it's worth the stress

phantastico

Albermarle said:

Not sure of your time scales but it might be better to save or invest the money. It will certainly be a lot simpler and a lot less hassle.
You can save 100% safely with a 5 year fixed term savings account or 5 year fixed term ISA, paying over 4%.
If your time scale was over 10 years, a regular medium risk investments fund would have a good chance of making a higher return than that, with only a small risk of any losses.
Or you could do both.

Thank you very much; this is really helpful.  Investments are a completely alien world to me, so I really appreciate your insight.  I'll look into both suggestions - cheers

cr1mson

Apologies for being a bit doom and gloomy but having thought about what would happen if your were to break up with partner house wise if it is tied to their job? 

If you bought another property and let it out couldn't just move back in. Investing it would probably be a better option and may need to factor in how you could have quick access to funds if needed as well as depending on amount of money trickling it into ISAs to fully utilise allowance.