Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • llyl
    • By llyl 10th May 18, 11:53 AM
    • 3Posts
    • 1Thanks
    llyl
    Additional Stamp Duty Question
    • #1
    • 10th May 18, 11:53 AM
    Additional Stamp Duty Question 10th May 18 at 11:53 AM
    Hello,
    I have a stamp duty question, really hope you can help or give me some advice…
    My boyfriend owns his flat for a couple of years. And back on Dec 17, I bought my first flat as a “buy-to-let” property as I was living with him.
    Last month, we decided that it is about time to get a bigger property as our family house and plan the future.

    Our plan is to sell his house and get a joint mortgage together for this new house. However, I’m planning to keep my "buy to let" flat.
    I’m not trying to avoid tax but I don’t think it makes sense if I have to pay additional property tax on the family house which is cost a lot more than my flat.
    Since my primary resident has always been my boyfriend’s flat, I wonder:
    1) Can my "buy to let" flat becomes my additional resident where I have to pay the additional property tax?
    2) What stamp duty will we need to pay for the future family house?

    Thank You in advance!
Page 1
    • hazyjo
    • By hazyjo 10th May 18, 11:58 AM
    • 10,883 Posts
    • 14,330 Thanks
    hazyjo
    • #2
    • 10th May 18, 11:58 AM
    • #2
    • 10th May 18, 11:58 AM
    Did your lender know you weren't going to live in it? Did you get a BTL mortgage (very unusual with your first property), or consent to let? (Or neither?!)


    Where are you registered for council tax/driving licence/electoral register?


    Might make a difference as to your options.
    2018 wins: Single Malt Whisky; theatre tickets; festival tickets; year of gin(!); shoes
    • Pixie5740
    • By Pixie5740 10th May 18, 12:27 PM
    • 12,907 Posts
    • 18,554 Thanks
    Pixie5740
    • #3
    • 10th May 18, 12:27 PM
    • #3
    • 10th May 18, 12:27 PM
    Hello,
    I have a stamp duty question, really hope you can help or give me some advice!!!8230;
    My boyfriend owns his flat for a couple of years. And back on Dec 17, I bought my first flat as a !!!8220;buy-to-let!!!8221; property as I was living with him.
    Last month, we decided that it is about time to get a bigger property as our family house and plan the future.

    Our plan is to sell his house and get a joint mortgage together for this new house. However, I!!!8217;m planning to keep my "buy to let" flat.
    I!!!8217;m not trying to avoid tax but I don!!!8217;t think it makes sense if I have to pay additional property tax on the family house which is cost a lot more than my flat.
    Since my primary resident has always been my boyfriend!!!8217;s flat, I wonder:
    1) Can my "buy to let" flat becomes my additional resident where I have to pay the additional property tax?
    2) What stamp duty will we need to pay for the future family house?

    Thank You in advance!
    Originally posted by llyl
    1) No. The new property you will buy will be the additional residential property since it is in addition to the property you already own.

    2) You will pay the higher rate of SDLT assuming the rental property is worth more than £40k.. There are plenty of SDLT calculators available online, such as this one. https://www.stampdutycalculator.org.uk/

    https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09730
    • llyl
    • By llyl 10th May 18, 1:18 PM
    • 3 Posts
    • 1 Thanks
    llyl
    • #4
    • 10th May 18, 1:18 PM
    • #4
    • 10th May 18, 1:18 PM
    Did your lender know you weren't going to live in it? Did you get a BTL mortgage (very unusual with your first property), or consent to let? (Or neither?!)


    Where are you registered for council tax/driving licence/electoral register?


    Might make a difference as to your options.
    Originally posted by hazyjo

    @ hazyjo - Thanks for your comments.
    Yes - I got a BTL mortgage and it was made very clear when I bought the house that I am going to let it with my solicitor. Hence my mortgage interest rate is higher than lots of first time buyer's.
    On top on that, all my council tax, driving licence, electoral register, bank and other bills are all registered to my boyfriend's flat since I have been living there for more than 3 years.

    Someone told me that I can put my BTL property as my additional property and the family house will be my main resident property. And I will be taxed on my BTL flat. So, just wondering if that is doable.
    • Pixie5740
    • By Pixie5740 10th May 18, 1:25 PM
    • 12,907 Posts
    • 18,554 Thanks
    Pixie5740
    • #5
    • 10th May 18, 1:25 PM
    • #5
    • 10th May 18, 1:25 PM
    Someone told me that I can put my BTL property as my additional property and the family house will be my main resident property. And I will be taxed on my BTL flat. So, just wondering if that is doable.
    Originally posted by llyl
    Someone is incorrect. You cannot elect which property you want to count as the additional property. See the SDLT manual I linked to above.
    • 00ec25
    • By 00ec25 10th May 18, 1:41 PM
    • 6,962 Posts
    • 6,649 Thanks
    00ec25
    • #6
    • 10th May 18, 1:41 PM
    • #6
    • 10th May 18, 1:41 PM
    Someone told me that I can put my BTL property as my additional property and the family house will be my main resident property. And I will be taxed on my BTL flat. So, just wondering if that is doable.
    Originally posted by llyl
    "someone" should be told to leave tax advice to those who know tax as that person has no clue.

    in order to avoid the higher rate SDLT (which is what you will pay because you can't avoid it on your plan) you would have to have a legal interest in BF's property, ie you need to be an owner of it and thus a co seller of it so that then, and only then, would you be replacing your main residence for the purposes of SDLT
    • andrewjb3
    • By andrewjb3 10th May 18, 3:17 PM
    • 36 Posts
    • 27 Thanks
    andrewjb3
    • #7
    • 10th May 18, 3:17 PM
    • #7
    • 10th May 18, 3:17 PM
    ...or marry him before you sell + buy. Then you (as a couple) are replacing your main home, so no extra tax applies.
    • SDLT Geek
    • By SDLT Geek 10th May 18, 4:07 PM
    • 306 Posts
    • 181 Thanks
    SDLT Geek
    • #8
    • 10th May 18, 4:07 PM
    • #8
    • 10th May 18, 4:07 PM
    I agree with the points that it would work if either you had an interest in your boyfriend!!!8217;s flat or you were married to him when he sells it.

    On either basis it would be important that you have lived in it as your only or main residence.
    • llyl
    • By llyl 10th May 18, 11:05 PM
    • 3 Posts
    • 1 Thanks
    llyl
    • #9
    • 10th May 18, 11:05 PM
    • #9
    • 10th May 18, 11:05 PM
    Thanks guys for your advice.
    If let's say, we are not ready to get married yet ... and I have to pay the additional property tax... Do I need to pay the 3% of the total amount of the family house or just on my equity part (let's say only 25%) of cost of the family house?

    I have also seen some comments on MSE forum suggesting another option:
    If I decide to not sell my BLT yet, but sell it within 3 years of after co-buying the family house
    that I can potentially get the additional property tax back. Is it correct?
    • Lysimache
    • By Lysimache 11th May 18, 1:31 AM
    • 175 Posts
    • 64 Thanks
    Lysimache
    3% on the whole amount of the family even if only one of you is the one who has two properties if there is a joint ownership.
    • scottishblondie
    • By scottishblondie 11th May 18, 4:33 AM
    • 2,023 Posts
    • 1,307 Thanks
    scottishblondie
    Thanks guys for your advice.
    If let's say, we are not ready to get married yet ... and I have to pay the additional property tax... Do I need to pay the 3% of the total amount of the family house or just on my equity part (let's say only 25%) of cost of the family house?

    I have also seen some comments on MSE forum suggesting another option:
    If I decide to not sell my BLT yet, but sell it within 3 years of after co-buying the family house that I can potentially get the additional property tax back. Is it correct?
    Originally posted by llyl
    You would pay the surcharge on the whole purchase price. It cannot be claimed back since the property has always been a BTL - the 3 year rule only applies if you are selling your previous main residence.
    • Pixie5740
    • By Pixie5740 11th May 18, 7:42 AM
    • 12,907 Posts
    • 18,554 Thanks
    Pixie5740
    It's almost as if you haven't bothered to read the SDLT manual I linked to in post #3.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,387Posts Today

8,938Users online

Martin's Twitter
  • RT @Dora_Haf: @MartinSLewis So many people on here saying they're great until you get your PROPER job. What if Your proper job Is ON zero?

  • RT @hslt88: @MartinSLewis I?m a trustee for a youth charity. We only have a limited pool of funds for flexible youth workers for holiday sc?

  • RT @Dan_i_elle_88: @MartinSLewis Loved working zero hour agency care work. Never out of work and I loved having the flexibility! Only left?

  • Follow Martin