Stamp duty question

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    Stamp duty question

    Hi Gurus,
    I am trying to figure out if I need to pay the 2nd stamp duty.
    I am buying a property which would be my main residence.
    I currently live in a property that I pay rent for as a tenant.
    However I own another property which I had bought to live in and had paid the lower rate of stamp duty on. I however never lived there and this property is let out as of now (Consent to let).
    So effectively I am a tenant and an owner simultaneously.

    When I try and fill the HMRC stamp duty calculator it tells me I owe a lower stamp duty.
    I think this is based on me saying I am replacing my main residence.
    I am not sure I am correct in saying the property I live in and pay rent for is my main residence.

    Grateful for any guidance. Thanks for your time.

    Thanks

    #2
    You are buying a 2nd home. Whether you live in either or both is irrelevant

    Comment


      #3
      You are not replacing your main residence in the sense that HMRC are asking.
      If you bought the other property a while ago, you should speak to a tax advisor.
      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


        #4
        Thanks Neelix and jpkeates appreciate your feedback. Higher stamp duty it is should have been obvious I will own 2 properties at the end of the transaction (previous one was bought in 2018) so naturally higher for the 2nd one.

        Comment


          #5
          It seems to depend on the timing.

          I used to think that if you owned another property which you let, you were just screwed, because of the second property thing (even if it was your residence you were buying).

          I've been advised otherwise, and that you would pay and reclaim.
          But I have zero experience of that and only been told it online (where it's impossible to check).
          But it might be possible and it's worth the effort of finding out.
          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


            #6
            Kekdal won’t be able to reclaim the higher rate of SDLT. That only works when someone buys a new main residence whilst keeping the old main residence, pays the higher rate of SDLT and then sells the old main residence within 3 years of completing the purchase of the new main residence. Then a claim for the refund of the additional SDLT can be made to HMRC.

            In this case the existing property has never been Kekdal’s main home so the additional SDLT can never be reclaimed.

            Comment


              #7
              I used to believe that as well - the HMRC manuals are pretty clear about the situation in my view.

              Which made the surcharge rules a real trap for anyone who owned a let property (maybe for some years) and, who then wanted to buy a home of their own).
              But some people claim to have succeeded in getting a refund.
              There are some examples elsewhere in this very thread, I think.

              So it's worth checking out.
              It's not, as I say, something I have any personal experience of and it's not what I expected to be the case.
              And I have no way of verifying the claims made.

              And it would be fair if the let property was purchased before the new surcharge was introduced.
              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
                The manual is clear, Kekdal will not be able to claim a refund if the BTL is disposed of after purchasing the new home. I don't know the circumstances the other posters to which you refer but they cannot be the same as Kekdal's as they would not be due a refund.

                I don't think it would be fair if the rules discounted properties brought before the higher rate of SDLT for the purchase of additional properties was introduced, which thankfully the rules do not do, as the idea behind the higher rate is to discourage people from owning more than one property not to create a loop hole so that those already with 1+ properties can purchase yet another property without having to pay the higher rate.

                Comment


                  #9
                  Thanks everyone I took professional advise from a qualified lawyer who confirmed that in my case I can't enjoy a lower rate. I kind of knew the answer but was clutching on straws . My oversimplified interpretation based on his advise is: HMRCs logic is if you have more than one property you pay higher rate on 2nd one no matter what situation you are in. When you sell your main residence to buy elsewhere you would pay lower stamp duty otherwise you would have 2 properties both on higher rate which is not right (might need to go down the reclaim route if you only sold it after 3 years etc). Anyone can have one property at the lower rate even if you sell and move on.

                  I haven't posted on this forum before so not sure if there is something like a closure/conclusion but my question has been answered would request someone to help mark is answered or close or so.

                  Many thanks to everyone for taking time to respond to my query.

                  Comment

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