buying a new home before selling our existing one

LindaSecker54

We are in the enviable position of being able to buy our new house, without yet selling our existing one. We've spent the last few months doing up our house and are now ready to put it on the market, and we will exchange on our new house this week. My questions are these....

Firstly, I know we will have to pay the higher rate of stamp duty and then claim the excess back once our house is sold, but does anyone know if the house needs to be on the market BEFORE we exchange on the new one? Or does it not matter? 

Does anyone know if we will have to pay capital gains on our current house once we sell it? Or is there a grace period like for the (claiming back of excess) stamp duty?

Any other tips for me?

I've got a horrible feeling our pension pot is disappearing before our eyes

TheJP

It doesnt matter if your house is on the market before you exchange, you can still own it for 2 years after completing on your new house and then sell it and still claim back the higher rate. You have 3 years from the time you complete on the additional property.

Not sure about capital gains tax but if you are selling straight away then i doubt it.

p00hsticks

For SDLT you don't need to market the existing house prior to buying the new one - just complete the sale of your existing house within three years of the exchange (completion ?)  on the new one. 

Re: CGT - you can only have only main residence at a time, but if your current property has been your main residence for the whole of the time you have owned it until you purchase and move into the new one then you have an additional nine months grace period before you need to consider CGT. And even if you don't sell by then, assuming you have lived in the house for some time the CGT is likely to be negligible or non-existent as it will only be calculated on the proportion of time when it has not been your main residence. 

Flugelhorn

we did this a couple of times - most recently a few years back -  bought new one in April - old one up for sale in June and completed September - higher rate SDLT back in about 3 weeks with a bit of interest

Only advice - stick to one date for when you "move" a lot easier - was having to work out how long I had been at the new address and that means you have to remember when you actually decided to "move 

LindaSecker54

Thanks both of you - I will sleep tonight now

We've been in this house 40 years, leaving it will be a huge wrench and I was beginning to wish we'd never looked for a new one!

LindaSecker54

and thanks Flugelhorn too - that would not have occurred to me and makes perfect sense

Albermarle

Any other tips for me?

Maybe before your next major financial transaction, find out about tax rules before making it, and not afterwards.

LindaSecker54

first and last time..... major financial transactions are not something we do