Stamp duty as a ' homeless' person who has come into money and wants to BTL

littlefig73

Hi, I am 53 and after years of renting i ended up 2 years ago moving in with my mum as i was no longer able to work and pay rent due to health problems. My mum is alone and 83 and needs companionship and help , so it works nicely. I have come into some money - £200k and would like to invest this in a property to rent for income ( but to eventually live in when my mum passes) but I'm confused about the stamp duty. Do I still have to pay the higher stamp duty attached to btl mortgages? Or do my circumstances mean I qualify for the lower stamp duty attached to residential mortgages? 

Grumpy_chap

littlefig73 said:

Hi, I am 53 and after years of renting i ended up 2 years ago moving in with my mum as i was no longer able to work and pay rent due to health problems. My mum is alone and 83 and needs companionship and help , so it works nicely. I have come into some money - £200k and would like to invest this in a property to rent for income ( but to eventually live in when my mum passes) but I'm confused about the stamp duty. Do I still have to pay the higher stamp duty attached to btl mortgages? Or do my circumstances mean I qualify for the lower stamp duty attached to residential mortgages? 

Do you own any other property in the UK or elsewhere?
Have you ever owned any other property in the UK or elsewhere?

FWIW - I don't consider that the use of the descriptor 'homeless' person is either correct or helpful in the context of the thread question that is being asked.

Keep_pedalling

As you do not appear to own any property at the moment, no you won’t pay the additional tax, but do not legal into this without doing some serious research on what is involved in being a landlord and the pitfalls you could fall into.

saajan_12

littlefig73 said:

Hi, I am 53 and after years of renting i ended up 2 years ago moving in with my mum as i was no longer able to work and pay rent due to health problems. My mum is alone and 83 and needs companionship and help , so it works nicely. I have come into some money - £200k and would like to invest this in a property to rent for income ( but to eventually live in when my mum passes) but I'm confused about the stamp duty. Do I still have to pay the higher stamp duty attached to btl mortgages? Or do my circumstances mean I qualify for the lower stamp duty attached to residential mortgages? 

Bold is incorrect - the different stamp duty rates are not attached to any mortgage type, it depends on the facts of the purchase not whether you borrowed money. 

If this would be your only property then you would pay the standard SDLT. If you subsequently bought another (whether as a BTL or to live in) and didn't sell this one, you'd pay the higher rate on the 2nd property. 

user1977

Have you checked whether you can even get a BTL mortgage? The lenders tend to prefer you to own your own property, and not having a separate income isn't going to help either (how are you going to pay the mortgage if there isn't any rent coming in?).

The stamp duty will be at "normal" rates, but be aware you won't qualify for the first time buyer relief if you're not buying the property to live in (and won't be able to claim it for any future purchase either).

sheramber

What price of property are you considering buying?

As you are not working you may find it difficult to get a mortgage.