New Home/Old Home

JS999uk

If I were to purchase a house, move in, spend the next 6 months renovating my old house before putting it up for sale.

Will I pay capital gains tax on my old property when it eventually sells?

There will be no mortgage on either property.

I am unsure if my old home would be classed a s a second home and whether that would result in capital gains tax or any other tax when it is eventually sold.

Keep_pedalling

No, but you would pay the second home tax on the new purchase, which you can claim back on the sale of you current home if sold within 3 years.

Often any money you put in to doing up your home is fully recovered in the eventual sale price so I would not go beyond a lick of paint.

JS999uk

Good to know.

Thanks for the reply Keep_pedalling.

GrumpyDil

https://forums.moneysavingexpert.com/discussion/comment/82103872#Comment_82103872

@Keep_pedalling Assume you mean 'not fully recovered'

Dustyevsky

We don't know the level of skills the OP can apply to renovation, nor what their judgement is like when it comes to selecting fittings and finishes. It's a fine balancing act, and naturally, we all have 'good taste.'

Maybe the best approach would be to walk a few agents through the property with the aim of getting realistic 'done up' and 'as is' prices.

I did that with an inherited property, and decided to go for renovation. On paper, it was worth it, but only just, and it broke the ceiling price for the road. Meanwhile, I lost 10 months of my life and still didn't get it completely right. Would I do it again all other things being equal? Nope, but I'm only moderately skilled.

UKTaxHelper

On the refund bit, worth knowing it isn't automatic. You have to apply for it yourself, and the window is 12 months from selling the old place, so it's easy to sell up and forget about it.