Additional Property SDLT

Nicknickmm

Hi,

I own a flat that I’ve been trying to sell for the past 3 years, but due to cladding issues I had to rent it out instead. The cladding work has now been completed, but it caused significant leaks which are taking a long time (over a year) to fix. As a result, I can only rent one room, and the affected room remains vacant.

We previously bought a house and paid the additional stamp duty, lived there for 2 years, but weren’t happy in the area so sold it and moved into rented accommodation while waiting for the flat issues to be resolved. We’ve now been renting for over a year.

A friend suggested we may be able to avoid paying additional stamp duty on a new purchase since our main residence is currently rented, and they were in a similar situation. I’ve also read that because we already paid additional SDLT on a previous property and have since sold our former main residence, we may be considered to be replacing our main residence (even though we’ve been renting in between).

We’re keen to settle into a long-term home, especially with two children. We may be able to buy by taking out a buy-to-let mortgage on the flat and using savings for a deposit, but we cannot afford the additional SDLT.

Any advice would be greatly appreciated.

Thanks,
Nick

_Penny_Dreadful

https://forums.moneysavingexpert.com/discussion/6655549/additional-property-sdlt

I think your friend has misunderstood the rules.

What you can do is purchase a new main residence within 3 years of selling your last main residence (the place you bought and didn’t like) and it will count as replacing your main residence and therefore the higher rate of SDLT will not be due.

Nicknickmm

https://forums.moneysavingexpert.com/discussion/comment/81886614#Comment_81886614

Great, thanks so much for confirming.

SDLT_Geek

https://forums.moneysavingexpert.com/discussion/6655549/additional-property-sdlt

I agree with @_Penny_Dreadful, you should be able to benefit from the "replacement" rules, even though you have been renting since you sold the house you did not like. The rules are summarised well here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800