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    • UncleBryn
    • By UncleBryn 13th Jan 18, 12:20 PM
    • 1Posts
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    UncleBryn
    Stamp duty rate applicable to purchase of a property for improvements to own home
    • #1
    • 13th Jan 18, 12:20 PM
    Stamp duty rate applicable to purchase of a property for improvements to own home 13th Jan 18 at 12:20 PM
    Good morning,

    I understand the basic rules regarding stamp duty and how this applies to ownership of a second property but I'd be grateful if someone could clarify the situation with regards to a possible future scenario.

    My query stems from two issues with my immediate (elderly) neighbour's house: Firstly, that his tarmac driveway is only separated from my own tarmac driveway by a series of concrete kirbstones and there is a bollard at the beginning of the first kirbstone, near the road. The combination of kirbstone and bollard makes life very difficult for our vistors with no end of wheel being kirbed and low=level panels being scratched. Secondly, my neighbour's rear garden doglegs around the back of my own small rear garden.

    My wife and I would like to think that when the time comes and my neighbour's house is up for sale that we could buy his house, remove the concrete kirbstones and repartition the boundaries such that we become the owner of the part of his garden that doglegs around our own. I envisage that we would only own our neighbour's house for around three months.

    Someone told us that the additional 2% stamp duty would not be applicable in this scenario because the second property was only being purchased in order to make improvements to our own house, and it was not therefore being purchased as a second home or a buy to let. We have lived in our own home for 25 years and have no intention of moving, and my neighbours property would be put up for sale at around the 250k mark.

    Could anyone please clarify the rules with respect to whether there are some exceptions to the blanket 3% additional rule?

    Thank you.
Page 1
    • davidmcn
    • By davidmcn 13th Jan 18, 12:42 PM
    • 7,863 Posts
    • 8,042 Thanks
    davidmcn
    • #2
    • 13th Jan 18, 12:42 PM
    • #2
    • 13th Jan 18, 12:42 PM
    Someone told us
    Originally posted by UncleBryn
    Who is this someone? A bloke down the pub, or someone who's meant to know about stamp duty?

    Anyway, they're downright wrong - what you intend to do with the property is irrelevant, what matters is the situation at the time you complete your purchase. You could avoid it by just buying the bit of land in question rather than the whole property.
    • 00ec25
    • By 00ec25 13th Jan 18, 12:54 PM
    • 6,517 Posts
    • 6,078 Thanks
    00ec25
    • #3
    • 13th Jan 18, 12:54 PM
    • #3
    • 13th Jan 18, 12:54 PM
    since this "someone" can't even mention the correct rate why are you "listening" to them?

    you intend to buy a property without at the same time disposed of (aka "replacing") the one you live in as your main home = pay the higher (+3%) rate

    explained in many places you could have looked at yourself...
    https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

    https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-for-purchases-of-additional-residential-properties
    • Bad Ash
    • By Bad Ash 13th Jan 18, 12:58 PM
    • 45 Posts
    • 11 Thanks
    Bad Ash
    • #4
    • 13th Jan 18, 12:58 PM
    • #4
    • 13th Jan 18, 12:58 PM
    Have you factored in all the other costs to buy the property (legal fees, search, etc.) and then to sell the property (more legal fees and estate agent fees)?

    Why not speak to your neighbour about both issues and see if you can sort them before he sells?
    • Tom99
    • By Tom99 13th Jan 18, 1:05 PM
    • 2,263 Posts
    • 1,532 Thanks
    Tom99
    • #5
    • 13th Jan 18, 1:05 PM
    • #5
    • 13th Jan 18, 1:05 PM
    It will cost you a fortune in fees and stamp duty to proceed as you propose. In addition you will probably have to sell for less than you paid and the purchase may not be able to get a mortgage because you have owned the property for such a short time.
    What's wrong with doing a deal with your neighbour now just to tidy up the bits you want?
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