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  • Buy-to-Let

    Elect to pay Stamp duty

    I have bought a buy to let property with cash at 55,000 spent 12,000 on refurbishment including some structural work, fees, council tax etc and believe the house will be worth at least 80,000 - it is my only house, I am renting right now.  

    I would rather pay the stamp duty on 55,000 than 80,000 when I come to mortgage it as a buy to let to release funds to go onto another one, as it saves over £800. 

    Can I elect to pay stamp duty now for the buy to let even though I don’t own another home? 

    I intend to buy within the next year and this should also save on more paperwork later when I have a residential home.

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    You don't  pay any stamp duty up to £125,000

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    SDLT starts at £40000 for a second property

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    You don't pay stamp duty on a remortgage, unless you alter the ownership.

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    I know I don’t pay stamp duty on first house/residential home but the minute I buy my real home I will have to elect to pay 3% stamp duty on the whole value of the buy to let property and I will have to pay more stamp duty as it will be worth more than when I bought it for cash - I have no mortgage on it now so it is still worth 55,000 until I have it revalued.  I would rather pay stamp duty on that property now at the valuation of 55,000.  I know I don’t need to pay stamp duty but I want to pay it now at the lower value than later when it is worth more money does anyone know if it is possible to do this?

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    You will pay stamp duty on your new residential home unless you are selling another primary residence as you will own more than one home. Unless  you have sold a primary residence inside the last three years when you buy the new home.

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    That's not how SDLT works.  It sounds like you won't be paying any unless your next house is over the threshold.


    Unless you are thinking of GCT and paying the GCT now?  Of which won't work either as it is the on the value increase.

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    Stamp duty is not retrospective so you are where you are with the current property ie: free of stamp duty. If you subsequently purchase another property, either your own main residence or another BTL, you will pay the additional SDLT according to the new rules. Painful if it's your main residence but that's how it is.

    However, you could setup up a Ltd Co, transfer the current BTL to that (subject to CGT and SDLT but at a manageable level) and then you are free to purchase a main residence without being subject to punitive levels of stamp duty

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    Thanks Doug, I was under the misguided idea that I could choose  which property I could make as my main residence, which I think you can do something like that if you own your own property already and want to sell and have another property as main residence, you pay new stamp duty and get old stamp duty back.  I now realise if you don’t own your own first property you are at a disadvantage.  I know sett8ng up your own company is quite cheap to do but then having to buy your property into the company, use solicitors and pay cgt and other charges will probably end up being more than the stamp duty I would pay.  I will look into it some more and  see what the costs are. Thanks for your advice.

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    Transferring your first property to a limited company of which you are a shareholder would not help to avoid the additional 3% sdlt on any subsequent purchase.The only way to avoid the 3% sdlt is a simultaneous sale and purchase of your main residence or a sale of your resi and a purchase of another resi within 36 moths when you can reclaim the 3%

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    You would/should have paid stamp duty on purchase. It’s got nothing to do with the value after you have refurbished it. The fact that you (presumably) think that you haven’t paid stamp duty up until now probably means that the solicitor who did the conveyancing probably thought that no stamp duty was payable.

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