ADS Rules in Scotland - Residential Mortgage to Buy-to-Let

SavvyMoney1

Hi MSE Forum,

I'm trying to understand more about the Additional Dwelling Supplement applicable in Scotland to 2nd homes/buy-to-let purchases. It's all hypothetical but does anyone know if this would apply if I converted my residential mortgage to a buy-to-let and purchased a primary residence in England, rather than purchasing an additional rental property in Scotland? 

Thanks!

poseidon1

SavvyMoney1 said:

Hi MSE Forum,

I'm trying to understand more about the Additional Dwelling Supplement applicable in Scotland to 2nd homes/buy-to-let purchases. It's all hypothetical but does anyone know if this would apply if I converted my residential mortgage to a buy-to-let and purchased a primary residence in England, rather than purchasing an additional rental property in Scotland? 

Thanks!

If you bought another property in England whilst still owning a property in Scotland, you would have to pay English 2nd property SDLT ( now 5%) in addition to the normal SDLT on the property purchase price.

Since you intend buying your next property in England why were you looking at Scotland 's ADS regime?

SavvyMoney1

I'm looking at hypotheticals to best plan for the future and where to live etc. So basically, I would just be liable for the English SDLT on a second property, even if I converted my Scottish residential mortgage into a buy-to-let?

Bookworm105

SavvyMoney1 said:

I'm looking at hypotheticals to best plan for the future and where to live etc. So basically, I would just be liable for the English SDLT on a second property, even if I converted my Scottish residential mortgage into a buy-to-let?

a change in type of mortgage on a property you already own in your own name has zero impact on stamp duty, be it ADS or SDLT

the clue is given by the fact stamp duty applies to the change in ownership of a property, not how it is funded. Higher rate stamp duty (be it ADS or SDLT) applies to the increase in the number of properties you own and whether the new one is, or is not, linked to the replacement (sale in simple terms) of your current main residence.

hypotheticals can be dealt with by a bit of reading of the basic facts 
Higher rates of Stamp Duty Land Tax - GOV.UK

The Additional Dwelling Supplement (ADS) | Revenue Scotland

if you own 1, retain it, and buy another, you now own 2 so have triggered higher rate on the new one
if you own one (main) home, sell it, and buy a replacement (main home) you have not triggered it 

poseidon1

Bookworm105 said:

SavvyMoney1 said:

I'm looking at hypotheticals to best plan for the future and where to live etc. So basically, I would just be liable for the English SDLT on a second property, even if I converted my Scottish residential mortgage into a buy-to-let?

a change in type of mortgage on a property you already own in your own name has zero impact on stamp duty, be it ADS or SDLT

the clue is given by the fact stamp duty applies to the change in ownership of a property, not how it is funded. Higher rate stamp duty (be it ADS or SDLT) applies to the increase in the number of properties you own and whether the new one is, or is not, linked to the replacement (sale in simple terms) of your current main residence.

hypotheticals can be dealt with by a bit of reading of the basic facts 
Higher rates of Stamp Duty Land Tax - GOV.UK

The Additional Dwelling Supplement (ADS) | Revenue Scotland

if you own 1, retain it, and buy another, you now own 2 so have triggered higher rate on the new one
if you own one (main) home, sell it, and buy a replacement (main home) you have not triggered it 

Thanks Bookworm105, I had neither the energy or inclination to explain further! 

Bookworm105

poseidon1 said:

Thanks Bookworm105, I had neither the energy or inclination to explain further! 

LOL, one does indeed find oneself repeating the same info many times on here in response to simple factual questions and thus inclinations do rise and fall