Buying a second propert to live in

Blockz99

Hi 
i’m selling my flat and want to buy 2 smaller fats . One to live in and one to rent . It’s likely I will buy the cheaper one to rent out first in the process and live there for a few months till i buy my more expensive main residence. When buying my main residence can I transfer the second home stamp duty to the price of the smaller but to let which I will have bough months previously ? No mortgages are involved .
Thanks 
Michael 

SDLT_Geek

Blockz99 said:

Hi 
i’m selling my flat and want to buy 2 smaller fats . One to live in and one to rent . It’s likely I will buy the cheaper one to rent out first in the process and live there for a few months till i buy my more expensive main residence. When buying my main residence can I transfer the second home stamp duty to the price of the smaller but to let which I will have bough months previously ? No mortgages are involved .
Thanks 
Michael 

Would the properties you buy be in England, so the relevant stamp duty is stamp duty land tax and the concern the imposition of the extra 5% SDLT for additional properties?

Is it the case that you have no other property interests in the world (including through trusts or partnerships) and nor are you caught through property interests belonging to a spouse / civil partner / minor children?

Also that you have been living in the flat that you are selling first, as your only or main residence?

If all those circumstances apply, then there is one scenario which could work out well for SDLT:

(a)  You buy the cheaper property first, not intending to live in it as your only or main residence.  This does not suffer the extra 5% as it is the only property you own at the time of its purchase.

(b)  You buy the second property on a later date, but within three years of selling your current home.  That purchase could benefit from the "replacement exception" and so not suffer the 5% surcharge either.  The conditions are set out in SDLTM09800. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

It would be much easier to demonstrate that you benefit from this scenario if you decide not to live in the cheaper property at all, but rent it out as soon as possible.

Blockz99

SDLT_Geek said:

Blockz99 said:

Hi 
i’m selling my flat and want to buy 2 smaller fats . One to live in and one to rent . It’s likely I will buy the cheaper one to rent out first in the process and live there for a few months till i buy my more expensive main residence. When buying my main residence can I transfer the second home stamp duty to the price of the smaller but to let which I will have bough months previously ? No mortgages are involved .
Thanks 
Michael 

Would the properties you buy be in England, so the relevant stamp duty is stamp duty land tax and the concern the imposition of the extra 5% SDLT for additional properties?

Is it the case that you have no other property interests in the world (including through trusts or partnerships) and nor are you caught through property interests belonging to a spouse / civil partner / minor children?

Also that you have been living in the flat that you are selling first, as your only or main residence?

If all those circumstances apply, then there is one scenario which could work out well for SDLT:

(a)  You buy the cheaper property first, not intending to live in it as your only or main residence.  This does not suffer the extra 5% as it is the only property you own at the time of its purchase.

(b)  You buy the second property on a later date, but within three years of selling your current home.  That purchase could benefit from the "replacement exception" and so not suffer the 5% surcharge either.  The conditions are set out in SDLTM09800. https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

It would be much easier to demonstrate that you benefit from this scenario if you decide not to live in the cheaper property at all, but rent it out as soon as possible.

Great Thanks for the clarity it’s of great help .