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If your portfolio is in excess of 6 properties and you sell them to your limited company are you exempt from the stamp duty surcharge?
As I understand it the surcharge doesn’t apply if you buy more than 6 properties in one transaction.
If correct landlords with a smaller portfolio could join another Landlord with a similar size and incorporate together to avoid the stamp duty charge. E.g Landlord 1 has 2 properties and Landlord 2 has 4.
The SDLT charge will still apply. The 6 property rule allows you to average the value of the properties if it results in a lower SDLT cost. It doesn't exempt you from the charge to this tax.
I was referring to the 3% surcharge.
Is this still applicable
The 6 property rule allows you to use commercial rates so the 3% would not apply but you would not be able to average the price and you would pay commercial rates on the total value
Director of Tax Peplows Limited
CTA ACA FCCA
There are ways to reduce SDLT and save on the SDLT surcharge, as we have identified in our articles:
1 – This is a relief whereby you can take the total value of the property portfolio using the averaging method
2 – Build a house instead of buy: when you buy a plot of land you pay SDLT on the value of the land only and no SDLT is payable on the completed home. In addition, vacant plots are often considered by HMRC as being liable for commercial rates of stamp duty rather than residential rates, and thus the 3% surcharge can be avoided
3 – If you find a property investor that purchased properties in a limited company it may be better for you to buy the company rather than individual properties from the company. SDLT is charged on land and property. Buying shares in a company attracts a different level of tax with Stamp Duty (SD) at 0.5%
4 – Commercial properties or buying flats above a shop. If you were to buy these types of properties you would pay the non-residential rates of SDLT and would not need to pay the 3% SDLT surcharge
5 - Property developers will not pay SDLT on a purchase that has fallen through or on part exchange with a vendor:
Simon Misiewicz | Business Development Manager
Telephone: 0115 939 4606
Thanks. The links don’t seem to work for me.
Property Tribes only allows links to sites that have an added level of security. Cut and paste the links without the https and you will be able to access them.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thanks for the tip. I will remember that for next time.