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First Time Buyer Commercial Conversion

Hello Good People,

Can anyone confirm if i am classed as a first time buyer or not.

I have bought a commercial property which was later converted converted to a residential buy to let.

I bought it using commercial bridging finance and remortgaged to a residential mortgage a year later.

Comments

  • Mark_d
    Mark_d Posts: 2,380 Forumite
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    You have previously owned a residential property hence I would not class you as a first time buyer
  • user1977
    user1977 Posts: 17,521 Forumite
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    Yes, I think the test is whether you currently own a residential property, so the fact it was treated as non-residential for stamp duty purposes when you bought is irrelevant.
  • SDLT_Geek
    SDLT_Geek Posts: 2,866 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    Hello Good People,

    Can anyone confirm if i am classed as a first time buyer or not.

    I have bought a commercial property which was later converted converted to a residential buy to let.

    I bought it using commercial bridging finance and remortgaged to a residential mortgage a year later.

    Are you now buying a property in England and are you asking about the stamp duty land tax relief for first time buyers for that purchase?

    If so, then the key issue is whether the you will still own your conversion when you buy the property.  If you will still own it, the extra 5% SDLT for additional properties will apply to your purchase and there is no question of first time buyers' relief applying.

    But if you sell / dispose of the conversion first, then oddly first time buyer's relief can still apply on the basis that you have never "acquired" a residential property before.  (The SDLT test is framed in terms of whether someone has ever acquired a residential property, not on whether they have ever owned a residential property.)
  • SDLT_Geek said:
    Hello Good People,

    Can anyone confirm if i am classed as a first time buyer or not.

    I have bought a commercial property which was later converted converted to a residential buy to let.

    I bought it using commercial bridging finance and remortgaged to a residential mortgage a year later.

    Are you now buying a property in England and are you asking about the stamp duty land tax relief for first time buyers for that purchase?

    If so, then the key issue is whether the you will still own your conversion when you buy the property.  If you will still own it, the extra 5% SDLT for additional properties will apply to your purchase and there is no question of first time buyers' relief applying.

    But if you sell / dispose of the conversion first, then oddly first time buyer's relief can still apply on the basis that you have never "acquired" a residential property before.  (The SDLT test is framed in terms of whether someone has ever acquired a residential property, not on whether they have ever owned a residential property.)
    This is where the confusion is but interesting point
  • Herzlos
    Herzlos Posts: 15,697 Forumite
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    It's going to hard to make an argument that you owned a residential property without acquiring it, with a straight face though.

    You could argue that you bought a commercial property, but you acquired a residential property when it was converted.

  • SDLT_Geek
    SDLT_Geek Posts: 2,866 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    Herzlos said:
    It's going to hard to make an argument that you owned a residential property without acquiring it, with a straight face though.

    You could argue that you bought a commercial property, but you acquired a residential property when it was converted.

    We do not know if OP is to retain the conversion (nasty for SDLT on a later purchase) or is first selling it (surprisingly nice for SDLT on a later purchase).  The SDLT rules are fairly prescriptive here, looking at the time the interest in the property was acquired.  The fact that something which was not a dwelling when bought, but later becomes a dwelling, does not itself mean one loses first time buyer status.

    I agree that it sounds rather too good to be true, but I stand by this one!
  • Herzlos
    Herzlos Posts: 15,697 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    It being remortaged with a residentual mortgage later "ought it using commercial bridging finance and remortgaged to a residential mortgage a year later." implies that the OP still has ownership of the property.
  • SDLT_Geek
    SDLT_Geek Posts: 2,866 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    Herzlos said:
    It being remortaged with a residentual mortgage later "ought it using commercial bridging finance and remortgaged to a residential mortgage a year later." implies that the OP still has ownership of the property.
    Agreed.

    The OP gives very little information.  I am speculating (not too wildly I hope) that the plan might be to sell the conversion and buy another residential property.
  • SDLT_Geek said:
    Herzlos said:
    It being remortaged with a residentual mortgage later "ought it using commercial bridging finance and remortgaged to a residential mortgage a year later." implies that the OP still has ownership of the property.
    Agreed.

    The OP gives very little information.  I am speculating (not too wildly I hope) that the plan might be to sell the conversion and buy another residential property.
    Sorry yes i do still own the property, the market has declined about 20k in my area which may put me at break even, it isn't appealing to sell at the moment but may sell in 3-5 years or so if market conditions improve. I will just have to put off buying my own residential 
  • JC2068
    JC2068 Posts: 9 Forumite
    Fourth Anniversary First Post
    SDLT_Geek said:
    Herzlos said:
    It's going to hard to make an argument that you owned a residential property without acquiring it, with a straight face though.

    You could argue that you bought a commercial property, but you acquired a residential property when it was converted.

    We do not know if OP is to retain the conversion (nasty for SDLT on a later purchase) or is first selling it (surprisingly nice for SDLT on a later purchase).  The SDLT rules are fairly prescriptive here, looking at the time the interest in the property was acquired.  The fact that something which was not a dwelling when bought, but later becomes a dwelling, does not itself mean one loses first time buyer status.

    I agree that it sounds rather too good to be true, but I stand by this one!
    This is correct. Nice little loophole here. 
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