Dear Forum members
I've joined the forum with a specific (initial!) question in mind. it's the ever thorny issue of the dreaded stamp duty (SDLT) and how it applies to rental property.
My situation is this:
My son owns no property currently (he rents where he lives), and has no plan, right now, to buy (can't afford where he wants to live!)
If he buys a property he can afford, and rents it out, I appreciate he will have to pay SDLT on the purchase price (he won't get the First Time Buyer exemption as he does not plan to live in the property himself)
BUT, if he were subsequently to buy a property for himself, for him to live in, will he then have to pay Second home SDLT (ruinous rate!) on that property, simply on the grounds that he already owns a property (albeit a rental one) (unless, of course, he were to sell the first, rental property, and so only pay the standard 'next property' SDLT)
Will it make any difference if the initial property he buys has a 12 month holiday rental restriction on it, so it cannot be used for long-term residential leases, but only FHL furnished holiday lets? (I ask because after all, he could never use this FHL property as his 'own home' as it has a non-residential restriction on it).
I have a bad, bad feeling that HMRC will hammer him for 2nd home SDLT if he buys his own home after buying ar rental property, even if his first property is either BTL or FHL.
I know a friend of mine who bought a BTL property AFTER she already owned her own home (before the days of the extra hike in 2nd home SDLT), and then when she sold her own home and bought another, she did NOT have to pay 2nd home SDLT, even though she still owned the rental property, as she was replacing her own residential home so the fact she still owned a rental property was 'discounted'.
Thank you for any replies, even if they only confirm my fears.
Lizbeth
I've joined the forum with a specific (initial!) question in mind. it's the ever thorny issue of the dreaded stamp duty (SDLT) and how it applies to rental property.
My situation is this:
My son owns no property currently (he rents where he lives), and has no plan, right now, to buy (can't afford where he wants to live!)
If he buys a property he can afford, and rents it out, I appreciate he will have to pay SDLT on the purchase price (he won't get the First Time Buyer exemption as he does not plan to live in the property himself)
BUT, if he were subsequently to buy a property for himself, for him to live in, will he then have to pay Second home SDLT (ruinous rate!) on that property, simply on the grounds that he already owns a property (albeit a rental one) (unless, of course, he were to sell the first, rental property, and so only pay the standard 'next property' SDLT)
Will it make any difference if the initial property he buys has a 12 month holiday rental restriction on it, so it cannot be used for long-term residential leases, but only FHL furnished holiday lets? (I ask because after all, he could never use this FHL property as his 'own home' as it has a non-residential restriction on it).
I have a bad, bad feeling that HMRC will hammer him for 2nd home SDLT if he buys his own home after buying ar rental property, even if his first property is either BTL or FHL.
I know a friend of mine who bought a BTL property AFTER she already owned her own home (before the days of the extra hike in 2nd home SDLT), and then when she sold her own home and bought another, she did NOT have to pay 2nd home SDLT, even though she still owned the rental property, as she was replacing her own residential home so the fact she still owned a rental property was 'discounted'.
Thank you for any replies, even if they only confirm my fears.
Lizbeth
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