can i jig my mortgages about like this when selling houses? got 2 to sell.

Jimster_s_2

i own a residential property. i am going to transfer this into a buy to let and rent it out while i buy another property to do up and sell. the one i currently own will be rented out and then when the new one is finished i will sell it for a profit. i wont pay tax on this becasue its my main property and ill be living there while doing it up.

when its sold can i then transfer my btl house back to a residential mortgage and then either live in again or possibly sell it with it being my main residence and so again not paying tax on it?

is this possible or once i transfer it into a buy to let is it stuck like that?

Doozergirl

You can do what you are asking. You can remortgage it at any time - beware of redemption penalties though! Consider the time frame within which you will be moving back and take any tie in periods into account.

You could probably transfer the residential mortgage from your project to the house with the BTL when you sell it. So tie-ins wouldn't matter so much on this one.

MarkyMarkD

You don't need to swap the mortgages around, necessarily. You can ask your existing lender for permission to let it out (for which they will normally charge a fee) and then take a residential mortgage on the new property.

Your main residence isn't exempt just because it's your main residence at the point of sale - it depends how long it was not your main residence for. As long as you sell it within 3 years of it ceasing to be your main residence, you are OK, though.

Jimster_s_2

great replies.

i just have to clear this tax thing up, im thinking i might be even better off. ill also post a question in the tax sextion and the mortgage section.

if i keep my existing residential mortgage and rent it out, buy my new house and let the inland revenue know that my new house is my main residence, then sell the new one in 6 months and not pay any capital gains tax, then let the inland revenue know my old one is once again my main residence. then ill be safe to sell my old one if i wanted too (or keep it) and still stay tax free?

do i even need to bother telling the inland revenue about changing residence?

whats this 3 year rule, im not quite sure about that?

if i can do the above it will save me a lot of messing and a lot of fees.

on a side note though, my current mortgage lender wont allow me to rent it out, so if i did id have to do it without telling them. or not actually rent it out at all, i just want to stay tax free on this new one.

thanks for any help.

eurows

How does that work then. Do you know something we don't.

You buy a house to do up and sell for profit in a falling marketplace.

GROW UP

Doozergirl

Childish insults aside, It's possible to make money from property in any marketplace. It's all about buying at the right price and turning it round quickly.

Jimster, I hope your project doesn't take three years! If you sell one after the other and each house is your main residence when you come to sell and have proof of having lived there for some period of time, I doubt the IR will have anything to say, unless you continue to buy and sell quickly.

eurows

Childish insults aside, It's possible to make money from property in any marketplace. It's all about buying at the right price and turning it round quickly.

And how exactly do you turn it round quickly when you have lumped loads of money on it doing it up and in the mean time prices are falling.

Doozergirl

If you are of the mindset that prices are going to hit the floor overnight, then there's no convincing you. A sensible developer will look for a profit of at least 20% after renovation costs to cover the event of falls in the market. So says Sarah Beany - we have the same boots you know :rotfl:

There's no excuse for telling people to grow up, you know - everyone's entitled to their own opinion. Just because it's not the same as yours doesn't make it childish.