Stamp duty holiday and main residence

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    Stamp duty holiday and main residence

    Hello,

    I own two properties: one is my main residence and the other one is let. I am thinking about selling the property where I live to move somewhere more convenient in terms of commuting. I cannot figure out whether or not I would fall into the stamp duty holiday scenario as I would be selling my main residence but it would still result that I have another property (even though it is let). Any ideas/thoughts? Thanks.

    #2
    It is not entirely clear what you intend to do since you have referred to selling but not buying. It is (mainly) buying that is relevant when it comes to SDLT.

    I presume based on the context that by "move" you mean sell your residential property and buy another. In that case additional rate SDLT would not apply since you would be replacing your main residence. In the case where you buy another property as your main residence before selling your existing one you are liable for the additional SDLT but can claim this back as long as you sell the old one within 36 months.

    The fact that you own a rental property does not affect the SDLT due (or not) on purchase of your main residence so the stamp duty holiday should apply to you the same as anyone else.
    There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

    Comment


      #3
      Thanks so much doobrey. I have been reading the gov.uk guidelines and got the answer: I qualify for the SD holiday. Thanks again for your reply.

      Comment


        #4
        You should expect to pay the extra 3% on sdlt on completion of purchase if you still have a property in your name.

        If you sell your main residence and buy a new main residence , the 3% does not apply or you can claim it back within 3 years of selling old main residence.

        Comment


          #5
          It seems like 2 contradictory answers

          Comment


            #6
            Originally posted by More View Post
            It seems like 2 contradictory answers
            There is no question that a purchaser will not be liable for additional rate (3%) SDLT on their Principal Private Residence if they are buying it to replace their existing PPR (and as long as that existing PPR is disposed of not later than 36 months after purchase). However, Gordon's point is that if they already own any other property at the time of purchase they may have to pay additional rate SDLT and then claim it back afterwards.

            My reading of the rules was that it would not be payable in the first place if the existing PPR had been sold at the time of purchase i.e.

            You must pay the higher SDLT rates when you buy a residential property (or a part of one) for £40,000 or more, if all the following apply:

            it will not be the only residential property worth £40,000 or more that you own (or part own) anywhere in the world
            you have not sold or given away your previous main home
            no one else has a lease on it which has more than 21 years left to run
            [emphasis added]

            https://www.gov.uk/guidance/stamp-du...ntial-property

            However, I haven't got personal experience of the scenario in question so I didn't comment further.
            There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

            Comment


              #7
              You need to be careful with the idea of reclaiming additional SDLT when you purchase a new home.
              While it seems that you can reclaim the 3% if you buy a new residence, I think the circumstances where that's possible are much more limited than people think.

              The rebate is designed to help people who, for some reason, aren't able to sell their home at the same time as buying a new one.
              If you already own a property, and buy a new home, the additional surcharge is due anyway, and I can't see how that would get a rebate.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                As per Post #2 and Post #6, additional rate SDLT is not due on purchase of a Principal Private Residence to replace existing PPR.

                See for instance https://www.gov.uk/stamp-duty-land-t...property-rates.

                You will not pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold.
                or https://wards.uk.com/news/penalty-st...ence-exception

                The majority of homeowners possess only one home or property and are unaffected by the new surcharge. An individual buying a second residential property can pretty much expect to pay the new stamp duty penalty or surcharge on that purchase. An exception is where the purchase is to replace a main residence. For this to apply there must be a sale of the existing main residence and the purchase of a replacement for it. Therefore the surcharge should not affect the majority of people moving in the conventional way, namely selling a home and buying a new home and moving on the same day. This applies no matter how many properties they may own in addition to their main home.
                There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

                Comment


                  #9
                  The examples quoted don't accommodate the scenario where someone owns more than one property and then replaces their residence.
                  The worked examples show that, in that situation the additional 3% is payable, but I think the rebate won't then be claimable.

                  Taking it to an extreme, let's imagine someone owns 30 properties moves house.
                  On what basis would the rebate be justified?
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    Seems intuitive enough to me. The additional rate applies to additional properties. Meaning additional to PPR.

                    https://coffinmew.co.uk/claiming-ref...al-properties/

                    Anyone purchasing an additional property ... must pay a higher rate of stamp duty if the new property does not replace their main residence.
                    [emphasis added]
                    There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

                    Comment


                      #11
                      jpkeates I'm afraid you are incorrect.
                      If you’re replacing your main residence

                      You will not pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold.

                      If you have not sold your main residence on the day you complete your new purchase you’ll have to pay higher rates. This is because you own 2 properties.

                      You can apply for a refund if you sell your previous main home within 36 months.

                      Comment


                        #12
                        The rebate rules don't cover the situation where having sold your previous main residence, you still have more than one property.
                        All of the examples being quoted are based on someone who owns two properties on a temporary basis because they have bought a new home before selling their previous home and then, subsequently, sell the original residence.

                        I can't find any examples where the same set of events happen when someone already owns another property that isn't their residence. I don't see how the rebate then applies.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment


                          #13
                          Well the main heading is higher rates for additional properties. The sub heading is if you're replacing your main residence.

                          My understanding is this has been the position for some years. I'll try and find some clarification but I agree it is ambiguous.

                          Comment


                            #14
                            I hesitate to use anything other than legislation but this 2016 opinion is fairly clear.

                            https://wards.uk.com/news/penalty-st...ce-exception/#

                            Comment


                              #15
                              Seems intuitive to me. The additional rate SDLT is due on property purchases additional to replacing own residence.

                              I have quoted official information from UKG in posts #6 and #8 and it doesn't strike me as ambiguous.

                              Wouldn't a dearth of examples describing the rebate being claimed by landlords or second property owners who sold their PPR and then bought another would be explained by the fact that they wouldn't pay the additional rate SDLT in the first place?
                              There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

                              Comment

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