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    • Maisie11
    • By Maisie11 4th Jul 18, 5:45 PM
    • 204Posts
    • 278Thanks
    Maisie11
    Help re Stamp Duty and New Build
    • #1
    • 4th Jul 18, 5:45 PM
    Help re Stamp Duty and New Build 4th Jul 18 at 5:45 PM


    Hello,





    I wonder if someone can guide me please. I have two houses - my main house in West Midlands that I permanently live in with the family and a small BTL flat worth approx. £190k which I have had for 10 years.





    I am looking to move and buy a new build for £420k I have some questions that hopefully someone can answer in order for me to make an informed decision.





    1. My current house is potentially worth £370k. The builder has suggested that part exchange might be available. Realistically what are they likely to offer me for my old house (20% less than market value?).





    I know itís a challenging market at present and its very attractive to have someone take my old house off me without the pain of showing people around etc.





    2. The BTL is worth 190k. I make a small profit of £200 per month. We are thinking of selling the property. If I sell my BTL within 3 years what stamp duty would I pay on the new build? I recognise that I will need to pay the higher rate stamp duty initially but if I sell the BTL within 3 years do I get a refund on the higher rate stamp duty tax.





    3. I have heard good things about Which? mortgage brokers. I will need to borrow an additional £60k in order to fund this move overall would you recommend that I use a broker please.







Page 1
    • 00ec25
    • By 00ec25 4th Jul 18, 5:57 PM
    • 7,215 Posts
    • 6,906 Thanks
    00ec25
    • #2
    • 4th Jul 18, 5:57 PM
    • #2
    • 4th Jul 18, 5:57 PM
    you are very confused
    - you are going to sell your current main home
    - you are going to buy a new main home (the fact it is new build is irrelevant for this question)
    - you are going to retain the BTL ... for now.

    You are therefore REPLACING YOUR MAIN HOME, so your exposure to the higher rate is based very simply on the timing of the sale, for which there are only 2 possibilities:

    a) if the sale of your current home completes on or before you complete the purchase of the new build you will NOT pay the higher rate at all

    b) if the sale of your current home completes after you complete the purchase of the new build you will pay the higher rate, but, provided the sale takes place within 3 years of the purchase, you can claim full refund

    - the sale of the BTL has no impact whatsoever on the higher rate SDLT on the purchase of the new home since the BTL is not your home and the higher rate is based on whether you are replacing your main home or not. You are replacing it...
    • davidmcn
    • By davidmcn 4th Jul 18, 6:23 PM
    • 9,075 Posts
    • 9,665 Thanks
    davidmcn
    • #3
    • 4th Jul 18, 6:23 PM
    • #3
    • 4th Jul 18, 6:23 PM
    My current house is potentially worth £370k. The builder has suggested that part exchange might be available. Realistically what are they likely to offer me for my old house (20% less than market value?).
    Originally posted by Maisie11
    Closer to market value I would have thought. But if they're giving you part-ex they're more likely to expect you to pay list price for the new place.
    • saajan_12
    • By saajan_12 5th Jul 18, 8:34 AM
    • 1,509 Posts
    • 1,116 Thanks
    saajan_12
    • #4
    • 5th Jul 18, 8:34 AM
    • #4
    • 5th Jul 18, 8:34 AM
    Hello,

    I wonder if someone can guide me please. I have two houses - my main house in West Midlands that I permanently live in with the family and a small BTL flat worth approx. £190k which I have had for 10 years.

    I am looking to move and buy a new build for £420k I have some questions that hopefully someone can answer in order for me to make an informed decision.

    1. My current house is potentially worth £370k. The builder has suggested that part exchange might be available. Realistically what are they likely to offer me for my old house (20% less than market value?). - they will look to sell it at market value so they will want to recover their buying & selling costs from you, as well as a margin to take away the risk of the price moving. So they'll buy from you at something below market rate, how much I'm not sure. Is there any reason you can't sell on the open market yourself?

    I know it!!!8217;s a challenging market at present and its very attractive to have someone take my old house off me without the pain of showing people around etc.- you can get agents to do that. The developers will still want their surveyor & valuer around so you will need to deal with some of that.

    2. The BTL is worth 190k. I make a small profit of £200 per month. We are thinking of selling the property. If I sell my BTL within 3 years what stamp duty would I pay on the new build? I recognise that I will need to pay the higher rate stamp duty initially but if I sell the BTL within 3 years do I get a refund on the higher rate stamp duty tax. - No, beause you haven't lived in the BTL recently, but that's irrelevant. The point is you're replacing your current main residence in the west.
    - If you sell then buy, (or on same day) then no higher rate stamp duty
    - If you buy then sell within 3 years then you pay higher rate stamp duty on purchase of the new build, but get a refund when you sell your current main residence.


    3. I have heard good things about Which? mortgage brokers. I will need to borrow an additional £60k in order to fund this move overall would you recommend that I use a broker please.- In general a whole of market broker can really find a lender who isn't available to the general market or select the one providing the best rate / accepting your circumstances. Having said that, for a relatively low LTV, unless you have an unusual employment/credit history, you may be fine on your own and with a small loan size, getting a slightly better interest rate may not total as much as the broker fee - worth doing your sums.
    Originally posted by Maisie11
    Responses in line.
    Last edited by saajan_12; 05-07-2018 at 8:37 AM.
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