Sell house or use equity?

Ryano2801

I own a home which is on a buy to let mortgage. We rented it out while we lived in Canada, the person living there just basically covers the mortgage and a small amount extra but is an unbelievable tenant who I believe would stay in the house for another 10+ years given the option. 

However, we are now back from Canada (currently living with family elsewhere) and want to get a bigger house to live in. 

I have about £80,000 equity in the house and I am unsure if I am best to sell my house to fund a bigger home, or take the equity out and leave it rented out to the people and buy a second home. 

We will have to pay capital gains tax regardless when you sell a buy to let property (or at least that’s my understanding) so is it worth forking out the additional stamp duty to keep the home rented out and reap the rewards in 10 years time when there is less money to pay on the mortgage and house prices have increased (presumably).

I am going to set up a meeting with a financial advisor who can help explain things better but just thought I’d see what the general consensus is on here.
I also understand with labour in, there will be a big increase in stamp duty etc for people with second homes. 

Mutton_Geoff

Ryano2801 said:

I also understand with labour in, there will be a big increase in stamp duty etc for people with second homes. 

Do you have a reference for that?

Ryano2801

Mutton_Geoff said:

Ryano2801 said:

I also understand with labour in, there will be a big increase in stamp duty etc for people with second homes. 

Do you have a reference for that?

I do not, no. Just going off what I’ve been told by a couple of people since I moved back. Nothing that I’ve seen with my own eyes. 

Hopefully not true 

RAS

Well, technically, there will probably be some changes.

The temporarily increased SDLT liability limits end on March 31 2025. But that was a Conservative government decision taken three years ago.

Albermarle

Ryano2801 said:

Mutton_Geoff said:

Ryano2801 said:

I also understand with labour in, there will be a big increase in stamp duty etc for people with second homes. 

Do you have a reference for that?

I do not, no. Just going off what I’ve been told by a couple of people since I moved back. Nothing that I’ve seen with my own eyes. 

Hopefully not true 

There is a lot of speculation about the budget. Most of it will be wrong.
Also many people are misinformed about lots of things, so when looking at financial decisions, do not rely on mates or someone down the pub.

Ryano2801

Okay so maybe the bit I said about the budget proves to be false, we don’t know yet, but let’s assume that’s the case and nothing changes with stamp duty etc. 

Anyone have any advice on the actual question I’ve asked? 

Thanks 

strawb_shortcake

If you take equity from the property won't that increase your mortgage and subsequently the rent too? If your rent now only covers the mortgage and a little extra, would taking the equity still meet the lending criteria for a BTL mortgage? 

CGT is likely to be much less now than it will be in 10 years time