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Stamp duty question

gsix14
gsix14 Posts: 13 Forumite
in House buying, renting & selling
HI,

Please can you help me understand what will happen in this situation.

My wife and I currently own 1 house, which is our main residence. There is the possibility that my wife may become a part owner of another house that is being bought to help out a family member (who will be living in it and paying rent). I understand that stamp duty on this second property will include the additional 3%.

What I need to know is when we buy a new house for us (as our main residence) and sell our current house, will we need to pay the additional stamp duty on that due to my wife's part ownership of the other house?

I hope that is clear, please ask if anything needs clarifying and thank you in advance for your help.

Comments

  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Short answer: no

    The higher rate of SDLT is for the purchase of additional residential properties. When you come to buy a new home your wife will own 2 properties and at the end of the transaction will still only own 2 properties. There will be no additional property.

    https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730
  • gsix14
    gsix14 Posts: 13 Forumite
    Thank you, that's really helpful.
  • saajan_12
    saajan_12 Posts: 3,621 Forumite
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    Pixie5740 wrote: »
    Short answer: no

    The higher rate of SDLT is for the purchase of additional residential properties. When you come to buy a new home your wife will own 2 properties and at the end of the transaction will still only own 2 properties. There will be no additional property.

    https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730

    Not always: e.g. if selling and buying a new BTL while keeping your main residence, there is no increase in the total # owned properties but you DO still pay the higher rate stamp duty.

    OP- Higher rate stamp duty is due when you buy a property while owning another, UNLESS you are replacing your main residence at the same time. In your case, the new BTL will incur higher rate stamp duty. Then, if you sell your current main residence & buy a new one which becomes your new main residence, then you're part of the exception so higher rate stamp duty is NOT due.
  • gsix14
    gsix14 Posts: 13 Forumite
    Great thank you, that's what I thought was most likely to be the case. We know that on the BTL the higher rate would be due, but I just wanted to be sure that being involved with the BTL wouldn't end up costing us more when we want to move ourselves.
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