Higher SDLT Reclaim after selling BTL

Penny_Save_Is_Penny_Earn

Hi All,

We bought our first home 8 years back. We bought our second home 5 years back, since then our first home is in BTL. We are now planning to buy a new house to stay as our existing home is not big enough for our family.
As the new house is my third property, I have to pay higher SDLT. I want to pay and complete the purchase. I have two questions in regards claiming back the higher SDLT I paid.

1. Now third property is our home. If I sell my first two properties in next 3 years time, can I claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind my first property is with me even after I bought the second one)
2. Now third property is our home. If I transfer my first property to a limited company(I am the director of that company) and sell second property, can I still claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind I am still owning my first property via limited company)

I am not bothered about capital gains tax as I know its separate thing to tackle.

I really appreciate if you could look into above two questions and guide me.

Regards,
Peddi.

RAS

If your replace your existing primary residence (home 2) with another primary residence (home 3), you don't pay the additional SDLT unless you retain home 2.

If you retain home 2 when you purchase home 3, providing you sell home 2 within 3 years, you can reclaim the additional SDLT because by the 3 year deadline you have not increased the number homes you own. Home 1 is irrelevant, there is no requirement to limit yourself to one home to get the rebate.

Not sure if there are any SDLT considerations if you rent home 2 out during the next three years but be aware you could get a tenant who decides not to move out and takes 18 months to evict.

Grumpy_chap

peddi said:

Hi All,

We bought our first home 8 years back. We bought our second home 5 years back, since then our first home is in BTL. We are now planning to buy a new house to stay as our existing home is not big enough for our family.
As the new house is my third property, I have to pay higher SDLT. I want to pay and complete the purchase. I have two questions in regards claiming back the higher SDLT I paid.

1. Now third property is our home. If I sell my first two properties in next 3 years time, can I claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind my first property is with me even after I bought the second one)
2. Now third property is our home. If I transfer my first property to a limited company(I am the director of that company) and sell second property, can I still claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind I am still owning my first property via limited company)

I am not bothered about capital gains tax as I know its separate thing to tackle.

I really appreciate if you could look into above two questions and guide me.

Regards,
Peddi.

A bit confusing, but I think you are saying:

 - Property 1 purchased 8 years ago.  Lived in (PPR) for 3 years, rented for the last 5 years.
 - Property 2 purchased 5 years ago and lived in all the time (PPR)
 - Property 3 to be purchased now and will be lived in (PPR)

If you sell property 2 within the time limits from purchase of property 3, you are able to reclaim the higher rate SDLT as sale and purchase of PPR.
Selling property 1 will make no difference to the SDLT on property 3 as property 1 is not currently your PPR.

I am not sure what you intend to achieve by selling property 1 to your Ltd Co.  The Ltd Co will need to pay higher rate SDLT on the purchase.

SDLT_Geek

Grumpy_chap said:

peddi said:

Hi All,

We bought our first home 8 years back. We bought our second home 5 years back, since then our first home is in BTL. We are now planning to buy a new house to stay as our existing home is not big enough for our family.
As the new house is my third property, I have to pay higher SDLT. I want to pay and complete the purchase. I have two questions in regards claiming back the higher SDLT I paid.

1. Now third property is our home. If I sell my first two properties in next 3 years time, can I claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind my first property is with me even after I bought the second one)
2. Now third property is our home. If I transfer my first property to a limited company(I am the director of that company) and sell second property, can I still claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind I am still owning my first property via limited company)

I am not bothered about capital gains tax as I know its separate thing to tackle.

I really appreciate if you could look into above two questions and guide me.

Regards,
Peddi.

A bit confusing, but I think you are saying:

 - Property 1 purchased 8 years ago.  Lived in (PPR) for 3 years, rented for the last 5 years.
 - Property 2 purchased 5 years ago and lived in all the time (PPR)
 - Property 3 to be purchased now and will be lived in (PPR)

If you sell property 2 within the time limits from purchase of property 3, you are able to reclaim the higher rate SDLT as sale and purchase of PPR.
Selling property 1 will make no difference to the SDLT on property 3 as property 1 is not currently your PPR.

I am not sure what you intend to achieve by selling property 1 to your Ltd Co.  The Ltd Co will need to pay higher rate SDLT on the purchase.

What a good reply!

Penny_Save_Is_Penny_Earn

Grumpy_chap said:

peddi said:

Hi All,

We bought our first home 8 years back. We bought our second home 5 years back, since then our first home is in BTL. We are now planning to buy a new house to stay as our existing home is not big enough for our family.
As the new house is my third property, I have to pay higher SDLT. I want to pay and complete the purchase. I have two questions in regards claiming back the higher SDLT I paid.

1. Now third property is our home. If I sell my first two properties in next 3 years time, can I claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind my first property is with me even after I bought the second one)
2. Now third property is our home. If I transfer my first property to a limited company(I am the director of that company) and sell second property, can I still claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind I am still owning my first property via limited company)

I am not bothered about capital gains tax as I know its separate thing to tackle.

I really appreciate if you could look into above two questions and guide me.

Regards,
Peddi.

A bit confusing, but I think you are saying:

 - Property 1 purchased 8 years ago.  Lived in (PPR) for 3 years, rented for the last 5 years.
 - Property 2 purchased 5 years ago and lived in all the time (PPR)
 - Property 3 to be purchased now and will be lived in (PPR)

If you sell property 2 within the time limits from purchase of property 3, you are able to reclaim the higher rate SDLT as sale and purchase of PPR.
Selling property 1 will make no difference to the SDLT on property 3 as property 1 is not currently your PPR.

I am not sure what you intend to achieve by selling property 1 to your Ltd Co.  The Ltd Co will need to pay higher rate SDLT on the purchase.

Thank you very much for your reply. 

As per you and @RAS, we can still claim SDLT rebate as long as the current property is PPR and other property/properties we own is under BTL? Or am I missing something here. I am under impression that we should only have one property under our name to claim the SDLT rebate. I also paid higher SDLT when I bought my second house as PPR. As per above comments can I also claim the higher SDLT that I paid during second house buying as my first house is in BTL since then?

The first house selling is coming into picture because of my impression that we should have only one property to claim SDLT rebate. If that's not the case, I will simply keep it. 

Regards.

saajan_12

Penny_Save_Is_Penny_Earn said:

Grumpy_chap said:

peddi said:

Hi All,

We bought our first home 8 years back. We bought our second home 5 years back, since then our first home is in BTL. We are now planning to buy a new house to stay as our existing home is not big enough for our family.
As the new house is my third property, I have to pay higher SDLT. I want to pay and complete the purchase. I have two questions in regards claiming back the higher SDLT I paid.

1. Now third property is our home. If I sell my first two properties in next 3 years time, can I claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind my first property is with me even after I bought the second one)
2. Now third property is our home. If I transfer my first property to a limited company(I am the director of that company) and sell second property, can I still claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind I am still owning my first property via limited company)

I am not bothered about capital gains tax as I know its separate thing to tackle.

I really appreciate if you could look into above two questions and guide me.

Regards,
Peddi.

A bit confusing, but I think you are saying:

 - Property 1 purchased 8 years ago.  Lived in (PPR) for 3 years, rented for the last 5 years.
 - Property 2 purchased 5 years ago and lived in all the time (PPR)
 - Property 3 to be purchased now and will be lived in (PPR)

If you sell property 2 within the time limits from purchase of property 3, you are able to reclaim the higher rate SDLT as sale and purchase of PPR.
Selling property 1 will make no difference to the SDLT on property 3 as property 1 is not currently your PPR.

I am not sure what you intend to achieve by selling property 1 to your Ltd Co.  The Ltd Co will need to pay higher rate SDLT on the purchase.

Thank you very much for your reply. 

As per you and @RAS, we can still claim SDLT rebate as long as the current property is PPR and other property/properties we own is under BTL? Or am I missing something here. I am under impression that we should only have one property under our name to claim the SDLT rebate. I also paid higher SDLT when I bought my second house as PPR. As per above comments can I also claim the higher SDLT that I paid during second house buying as my first house is in BTL since then?

The first house selling is coming into picture because of my impression that we should have only one property to claim SDLT rebate. If that's not the case, I will simply keep it. 

Regards.

Fundamentally this is where you're going wrong. Think of SDLT rebates as allowing people (who may or may not have a bunch of investment properties) to move house without paying extra. 

Lets say you own 1 main home and 10 rentals.
- If you buy (or move) an 11th rental, then you pay the additional 5% SDLT, with no refunds. 
- If you move house normally, ie sell the main home and buy another main home on the same day, then you are exempt from the additional 5%. 
- If you have a short overlap, ie buy a new main home then you pay the 5%. But then if you move into your new main home and sell the prior with within the time limits, all while keeping then 10 rentals, then you get a refund of the 5% paid. 

Penny_Save_Is_Penny_Earn

saajan_12 said:

Penny_Save_Is_Penny_Earn said:

Grumpy_chap said:

peddi said:

Hi All,

We bought our first home 8 years back. We bought our second home 5 years back, since then our first home is in BTL. We are now planning to buy a new house to stay as our existing home is not big enough for our family.
As the new house is my third property, I have to pay higher SDLT. I want to pay and complete the purchase. I have two questions in regards claiming back the higher SDLT I paid.

1. Now third property is our home. If I sell my first two properties in next 3 years time, can I claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind my first property is with me even after I bought the second one)
2. Now third property is our home. If I transfer my first property to a limited company(I am the director of that company) and sell second property, can I still claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind I am still owning my first property via limited company)

I am not bothered about capital gains tax as I know its separate thing to tackle.

I really appreciate if you could look into above two questions and guide me.

Regards,
Peddi.

A bit confusing, but I think you are saying:

 - Property 1 purchased 8 years ago.  Lived in (PPR) for 3 years, rented for the last 5 years.
 - Property 2 purchased 5 years ago and lived in all the time (PPR)
 - Property 3 to be purchased now and will be lived in (PPR)

If you sell property 2 within the time limits from purchase of property 3, you are able to reclaim the higher rate SDLT as sale and purchase of PPR.
Selling property 1 will make no difference to the SDLT on property 3 as property 1 is not currently your PPR.

I am not sure what you intend to achieve by selling property 1 to your Ltd Co.  The Ltd Co will need to pay higher rate SDLT on the purchase.

Thank you very much for your reply. 

As per you and @RAS, we can still claim SDLT rebate as long as the current property is PPR and other property/properties we own is under BTL? Or am I missing something here. I am under impression that we should only have one property under our name to claim the SDLT rebate. I also paid higher SDLT when I bought my second house as PPR. As per above comments can I also claim the higher SDLT that I paid during second house buying as my first house is in BTL since then?

The first house selling is coming into picture because of my impression that we should have only one property to claim SDLT rebate. If that's not the case, I will simply keep it. 

Regards.

Fundamentally this is where you're going wrong. Think of SDLT rebates as allowing people (who may or may not have a bunch of investment properties) to move house without paying extra. 

Lets say you own 1 main home and 10 rentals.
- If you buy (or move) an 11th rental, then you pay the additional 5% SDLT, with no refunds. 
- If you move house normally, ie sell the main home and buy another main home on the same day, then you are exempt from the additional 5%. 
- If you have a short overlap, ie buy a new main home then you pay the 5%. But then if you move into your new main home and sell the prior with within the time limits, all while keeping then 10 rentals, then you get a refund of the 5% paid. 

Thank you. I really appreciate your quick reply. I still don't get answer to my question or I am confused.
I purchased my first home as PPR and then converted that to BTL after I bought my second home. Can I still claim the higher SDLT paid on my second house as my first house has been in BTL since then? The reason I am asking is I converted my first PPR into BTL so just wanted to clarify my case clearly.

Grumpy_chap

Penny_Save_Is_Penny_Earn said:

Thank you very much for your reply. 

As per you and @RAS, we can still claim SDLT rebate as long as the current property is PPR and other property/properties we own is under BTL? Or am I missing something here. I am under impression that we should only have one property under our name to claim the SDLT rebate. I also paid higher SDLT when I bought my second house as PPR. As per above comments can I also claim the higher SDLT that I paid during second house buying as my first house is in BTL since then?

The first house selling is coming into picture because of my impression that we should have only one property to claim SDLT rebate. If that's not the case, I will simply keep it. 

Regards.

If you are changing your PPR, then the SDLT surcharge can be avoided, or reclaimed, subject to time limits.  It does not matter how many BTLs you have in parallel to the PPR.

If you are increasing the number of properties owned, then the SDLT surcharge applies.  So, that will mean that you cannot reclaim the SDLT surcharge during second house buying.  You owned property 1 and, in addition, purchased property 2, so increasing the total number of properties owned and the SDLT surcharge applies.

saajan_12

Penny_Save_Is_Penny_Earn said:

saajan_12 said:

Penny_Save_Is_Penny_Earn said:

Grumpy_chap said:

peddi said:

Hi All,

We bought our first home 8 years back. We bought our second home 5 years back, since then our first home is in BTL. We are now planning to buy a new house to stay as our existing home is not big enough for our family.
As the new house is my third property, I have to pay higher SDLT. I want to pay and complete the purchase. I have two questions in regards claiming back the higher SDLT I paid.

1. Now third property is our home. If I sell my first two properties in next 3 years time, can I claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind my first property is with me even after I bought the second one)
2. Now third property is our home. If I transfer my first property to a limited company(I am the director of that company) and sell second property, can I still claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind I am still owning my first property via limited company)

I am not bothered about capital gains tax as I know its separate thing to tackle.

I really appreciate if you could look into above two questions and guide me.

Regards,
Peddi.

A bit confusing, but I think you are saying:

 - Property 1 purchased 8 years ago.  Lived in (PPR) for 3 years, rented for the last 5 years.
 - Property 2 purchased 5 years ago and lived in all the time (PPR)
 - Property 3 to be purchased now and will be lived in (PPR)

If you sell property 2 within the time limits from purchase of property 3, you are able to reclaim the higher rate SDLT as sale and purchase of PPR.
Selling property 1 will make no difference to the SDLT on property 3 as property 1 is not currently your PPR.

I am not sure what you intend to achieve by selling property 1 to your Ltd Co.  The Ltd Co will need to pay higher rate SDLT on the purchase.

Thank you very much for your reply. 

As per you and @RAS, we can still claim SDLT rebate as long as the current property is PPR and other property/properties we own is under BTL? Or am I missing something here. I am under impression that we should only have one property under our name to claim the SDLT rebate. I also paid higher SDLT when I bought my second house as PPR. As per above comments can I also claim the higher SDLT that I paid during second house buying as my first house is in BTL since then?

The first house selling is coming into picture because of my impression that we should have only one property to claim SDLT rebate. If that's not the case, I will simply keep it. 

Regards.

Fundamentally this is where you're going wrong. Think of SDLT rebates as allowing people (who may or may not have a bunch of investment properties) to move house without paying extra. 

Lets say you own 1 main home and 10 rentals.
- If you buy (or move) an 11th rental, then you pay the additional 5% SDLT, with no refunds. 
- If you move house normally, ie sell the main home and buy another main home on the same day, then you are exempt from the additional 5%. 
- If you have a short overlap, ie buy a new main home then you pay the 5%. But then if you move into your new main home and sell the prior with within the time limits, all while keeping then 10 rentals, then you get a refund of the 5% paid. 

Thank you. I really appreciate your quick reply. I still don't get answer to my question or I am confused.
I purchased my first home as PPR and then converted that to BTL after I bought my second home. Can I still claim the higher SDLT paid on my second house as my first house has been in BTL since then? The reason I am asking is I converted my first PPR into BTL so just wanted to clarify my case clearly.

No. 
If you kept house 1 (whether as a rental or a holiday home or whatever), then the higher SDLT paid for house 2 remains paid, no refunds. That's what the tax is targetting. 
Plus its been 5 years after you sold house 2, when the limit is 3 years. 

SDLT_Geek

saajan_12 said:

Penny_Save_Is_Penny_Earn said:

saajan_12 said:

Penny_Save_Is_Penny_Earn said:

Grumpy_chap said:

peddi said:

Hi All,

We bought our first home 8 years back. We bought our second home 5 years back, since then our first home is in BTL. We are now planning to buy a new house to stay as our existing home is not big enough for our family.
As the new house is my third property, I have to pay higher SDLT. I want to pay and complete the purchase. I have two questions in regards claiming back the higher SDLT I paid.

1. Now third property is our home. If I sell my first two properties in next 3 years time, can I claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind my first property is with me even after I bought the second one)
2. Now third property is our home. If I transfer my first property to a limited company(I am the director of that company) and sell second property, can I still claim the higher SDLT that's paid on my third property as I now have only one property(bear in mind I am still owning my first property via limited company)

I am not bothered about capital gains tax as I know its separate thing to tackle.

I really appreciate if you could look into above two questions and guide me.

Regards,
Peddi.

A bit confusing, but I think you are saying:

 - Property 1 purchased 8 years ago.  Lived in (PPR) for 3 years, rented for the last 5 years.
 - Property 2 purchased 5 years ago and lived in all the time (PPR)
 - Property 3 to be purchased now and will be lived in (PPR)

If you sell property 2 within the time limits from purchase of property 3, you are able to reclaim the higher rate SDLT as sale and purchase of PPR.
Selling property 1 will make no difference to the SDLT on property 3 as property 1 is not currently your PPR.

I am not sure what you intend to achieve by selling property 1 to your Ltd Co.  The Ltd Co will need to pay higher rate SDLT on the purchase.

Thank you very much for your reply. 

As per you and @RAS, we can still claim SDLT rebate as long as the current property is PPR and other property/properties we own is under BTL? Or am I missing something here. I am under impression that we should only have one property under our name to claim the SDLT rebate. I also paid higher SDLT when I bought my second house as PPR. As per above comments can I also claim the higher SDLT that I paid during second house buying as my first house is in BTL since then?

The first house selling is coming into picture because of my impression that we should have only one property to claim SDLT rebate. If that's not the case, I will simply keep it. 

Regards.

Fundamentally this is where you're going wrong. Think of SDLT rebates as allowing people (who may or may not have a bunch of investment properties) to move house without paying extra. 

Lets say you own 1 main home and 10 rentals.
- If you buy (or move) an 11th rental, then you pay the additional 5% SDLT, with no refunds. 
- If you move house normally, ie sell the main home and buy another main home on the same day, then you are exempt from the additional 5%. 
- If you have a short overlap, ie buy a new main home then you pay the 5%. But then if you move into your new main home and sell the prior with within the time limits, all while keeping then 10 rentals, then you get a refund of the 5% paid. 

Thank you. I really appreciate your quick reply. I still don't get answer to my question or I am confused.
I purchased my first home as PPR and then converted that to BTL after I bought my second home. Can I still claim the higher SDLT paid on my second house as my first house has been in BTL since then? The reason I am asking is I converted my first PPR into BTL so just wanted to clarify my case clearly.

No. 
If you kept house 1 (whether as a rental or a holiday home or whatever), then the higher SDLT paid for house 2 remains paid, no refunds. That's what the tax is targetting. 
Plus its been 5 years after you sold house 2, when the limit is 3 years. 

Good reply.

OP seems confused still and might want to read the guidance here, about higher rates of SDLT and replacement of main residence, especially the requirement, in order to qualify for a refund of having sold / disposed of a property they lived in as a remain residence: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

Penny_Save_Is_Penny_Earn

Thank you all for your valuable replies. It really cleared my doubts about getting rebate on higher SDLT.