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I know it may be a straight forward question, but just want to see if there is a way to get around it.
My wife and I own 2 BTL properties, they were purchased 10 years ago. We are currently renting a place as our home temporarily. Now we are planning to buy our main home due to family growth. My questions are:
1. Are we liable for the higher rate of Stamp Duty when purchase our home?
2. If so, this really bring us a big problem financially given our budget is so tight and not being able to cover the extra cost of 3%. Is it worth to buy our home using a company (if we need to open one)? or are there any other alternatives to get around this higher rate please?
Many thank in adv
SDLT is complicated.
Though the extra 3% is as I understand is quite simple.
If after you purchase an additional property (to buy your main home) you own 2 properties then you will pay the extra 3%.
It is not a tax on BTL etc.. It is simply a tax if you own more than 1 property at end of the transaction.
Looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance. The above is not financial advice, its me rambling - just passing time on a coffee break.
Adam, there is some exception for people who are switching their MAIN residence. There was something about the landlord getting a rebate on the extra 3% as long as they sold the previous main residence within 36 months. However I'm not sure what the situation is with a landlord with BLTs and renting.
A company does not help avoid the new SDLT. It's probably a bad idea to buy your main home in a company even if that DID work (because you won't get capital gains tax relief, you'll pay a higher rate of interest, etc).
I am not sure if this helps, but if you are currently in rented, but did have your own PPR within the last three years, then there is no SDLT to pay, as you are "moving" from one PPR to another (albeit with a gap).
In most cases someone already owning a buy to let property, who wishes to move house, should not be liable for the higher SDLT rate. This is becauase there is no retrospective tax to pay on the existing buy to let property, and the owner plans to replace their main residence.
Similarly a property investor who already owns multiple buy to let properties should not be liable for the the higher rate of stamp duty if they decide to move. Again this is because the owner plans to replace their main residence and there is no retrospective tax to pay on their existing buy to let portfolio.
An individual who owns a buy to let property, and who has sold their main residence, will have up to 36 months to buy a new one without paying the higher stamp duty rate. This is because ultimately they will have replaced their main residence at the end of the moving process. The grace period has been increased from the 18 months to 36 months to reflect "moving in difficult circumstances".