Possible tax on (briefly) owing two homes

jimmypick

Hi,

My wife and I are keen to move house quickly. We’ve found one we like and we can just about afford to buy it before we sell our current one.

But we’ve been warned about potential tax implications.

Our current house is in my wife’s name. The new one would be in my name. Would that help us avoid the relevant tax?

If I did have to pay it, would some be reimbursed with we sell our house? We want to sell asap but also don’t want to kiss out on this house. So we may have both for just a few weeks or a month or two.

A brief google hasn’t helped, so am hoping someone can help or point me in the right direction.

Cheers!

_Penny_Dreadful

https://forums.moneysavingexpert.com/discussion/6658280/possible-tax-on-briefly-owing-two-homes

You’re a married couple so it won’t matter that one is in your wife’s name and the other in yours. In terms of SDLT/LBTT/LTT you’ll be treated as a single economic unit and will have to pay the higher rate of SDLT/LBTT/LTT.

Providing the house in your wife’s name is sold within 3 years of buying the new home you should be able to claim back the additional SDLT/LBTT/LTT paid.

SDLT_Geek

https://forums.moneysavingexpert.com/discussion/6658280/possible-tax-on-briefly-owing-two-homes

I agree with what @_Penny_Dreadful has said if the property you are looking to buy is in England, so the relevant rules are the stamp duty land tax rules. You will find guidance on the conditions to meet to recover the 5% surcharge here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09800

WillowLeaf

Isn't there also the potential CGT if the new house becomes the 'main residence', and the old house, which then becomes a '2nd home' is not sold within 9 months?

p00hsticks

https://forums.moneysavingexpert.com/discussion/comment/81911968#Comment_81911968

Potentially, but unlikely if the property has been the persons main residence for any length of time and it sells soon after the 9 months.

lincroft1710

Probably be paying 2 lots of Council Tax.

Nasquerns

Pretty sure the tax usually depends on whether you temporarily own two properties, not just whose name it's in. If it's only for a short overlap, you might still get some of it refunded after you sell - worth double-checking before rushing.

Angelica123

https://forums.moneysavingexpert.com/discussion/6658280/possible-tax-on-briefly-owing-two-homes

As you are married unit, it doesn't matter that the new house is just in your name and old house is in wife's name. In view of that I do wonder if it's just better for the new house to be in both your names?

I guess whether this is a good idea depends on whether your current house is likely to be snapped up quickly. You talk about paying for both for just a few weeks but there's no way to guarantee that kind of timeline. Meanwhile you are paying for 2 council tax bills etc.