Author Topic: Stamp Duty on additional properties?  (Read 791 times)

Stamp Duty on additional properties?
« on: December 15, 2020, 10:40:07 am »
We are in the process of selling up and moving down to Devon. Although we also own a rental property, it's my understanding that there is no additional stamp duty payable on house purchase in Devon as we are selling our main home.  However, the house in Devon will be short term accommodation for us while we renovate it to become a holiday let.  So it seems that any further house purchase will incur additional stamp duty based on the fact that we will not be selling our "main" property. 

If I voluntarily paid the additional stamp duty on the property destined to become a holiday let, would it provide exemption of additional stamp duty on the purchase of our real main home in the future?
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Re: Stamp Duty on additional properties?
« Reply #1 on: December 15, 2020, 11:05:37 am »
I think you can transfer your 'residence' to your third (subsequent) at time of purchase and pay the stamp duty on your previous (second)  purchase at that time.  I also believe you have 3 years to complete that transfer if you pay stamp duty on the third purchase and claim that back when you transfer your residence and pay the stamp duty on the second purchase.

Only my understanding - check with conveyancer or HMRC.

Re: Stamp Duty on additional properties?
« Reply #2 on: February 06, 2021, 07:55:42 pm »
A bit late, but yes, if the other house is sold within three years of buying the new one, the additional duty previously paid can be refunded. Not my advice, but that received from multiple solicitors.

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Re: Stamp Duty on additional properties?
« Reply #3 on: February 06, 2021, 08:37:47 pm »
A bit late, but yes, if the other house is sold within three years of buying the new one, the additional duty previously paid can be refunded. Not my advice, but that received from multiple solicitors.

True. I did this with only 6 months to go.  The refund after the online application was surprisingly quick.
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Re: Stamp Duty on additional properties?
« Reply #4 on: February 06, 2021, 11:09:07 pm »
Thanks for the replies :thumbsup:  I've been advised by the solicitor handling the purchase that we will have to pay the additional stamp duty on our future main residence as we won't be selling the property that we're buying first... if that makes sense ???
Most of the stuff I say is true because I saw it in a dream and I don't have the presence of mind to make up lies when I'm asleep.   Bryan Andreas

Re: Stamp Duty on additional properties?
« Reply #5 on: February 08, 2021, 10:23:46 am »
A bit late, but yes, if the other house is sold within three years of buying the new one, the additional duty previously paid can be refunded. Not my advice, but that received from multiple solicitors.

ooh, that is interesting. (children in York house might have to find somewhere else to live earlier than they thought)
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Re: Stamp Duty on additional properties?
« Reply #6 on: February 09, 2021, 02:04:53 am »
Thanks for the replies :thumbsup:  I've been advised by the solicitor handling the purchase that we will have to pay the additional stamp duty on our future main residence as we won't be selling the property that we're buying first... if that makes sense ???

It appears to me that you might want to seek advice from a solicitor with a more holistic interpretation of the rules ...

The simple interpretation is that you're selling your main residence, buying a new residence (the future holiday let) not subject to the 3% uplift, then buying a further main residence which is subject to the uplift because you're not disposing of your current property.

However, HMRC guidance (https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09812) is explicit that "Merely occupying a property will not in itself make it a main residence.  There needs to be a permanence and expectation of continuation to the occupation to establish it as a main residence."

Further, "The test in respect of the new dwelling purchased is a question of intention, does the purchaser intend the dwelling to be his only or main residence?  This is a question of intention at the time of purchase. What has the purchaser acquired the property for?  [...] If the dwelling is intended to be put to other uses, for example as a source of income, then the intention test will not be met."

Your situation seems similar to case study 7 in https://www.blakemorgan.co.uk/wp-content/uploads/Downloads/SDLT-case-studies-for-3-surcharge-20.01.20.pdf - it might be possible to sell your current main home and buy the future holiday let without uplift (because you don't own a second property), occupy the FHL without it becoming your main residence (because you don't intend to be there for any length of time), then buy your real next main home without uplift (because you had previously disposed of your current main home).

You'll probably want a sympathetic solicitor to let you run that one though - and it might be easier to demonstrate that the future holiday let *isn't* your main home if you instead move into a caravan or a short term rental ...




(I think this guy might be a suitably sympathetic solicitor ... https://www.blakemorgan.co.uk/people/john-shallcross/ - he does Q&A on the Zoopla blog at https://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/ as well as the case studies linked above)

Re: Stamp Duty on additional properties?
« Reply #7 on: February 09, 2021, 02:07:10 am »
A bit late, but yes, if the other house is sold within three years of buying the new one, the additional duty previously paid can be refunded. Not my advice, but that received from multiple solicitors.

ooh, that is interesting. (children in York house might have to find somewhere else to live earlier than they thought)

I think there are two three year clocks in play - from purchase of the new house, *and* from the York house ceasing to be the main residence for you and/or your wife. That might make an even earlier move for the children ...

Re: Stamp Duty on additional properties?
« Reply #8 on: February 10, 2021, 05:31:55 pm »
Many thanks for this, very useful indeed :thumbsup:


It appears to me that you might want to seek advice from a solicitor with a more holistic interpretation of the rules ...

The simple interpretation is that you're selling your main residence, buying a new residence (the future holiday let) not subject to the 3% uplift, then buying a further main residence which is subject to the uplift because you're not disposing of your current property.

However, HMRC guidance (https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09812) is explicit that "Merely occupying a property will not in itself make it a main residence.  There needs to be a permanence and expectation of continuation to the occupation to establish it as a main residence."

Further, "The test in respect of the new dwelling purchased is a question of intention, does the purchaser intend the dwelling to be his only or main residence?  This is a question of intention at the time of purchase. What has the purchaser acquired the property for?  [...] If the dwelling is intended to be put to other uses, for example as a source of income, then the intention test will not be met."

Your situation seems similar to case study 7 in https://www.blakemorgan.co.uk/wp-content/uploads/Downloads/SDLT-case-studies-for-3-surcharge-20.01.20.pdf - it might be possible to sell your current main home and buy the future holiday let without uplift (because you don't own a second property), occupy the FHL without it becoming your main residence (because you don't intend to be there for any length of time), then buy your real next main home without uplift (because you had previously disposed of your current main home).

You'll probably want a sympathetic solicitor to let you run that one though - and it might be easier to demonstrate that the future holiday let *isn't* your main home if you instead move into a caravan or a short term rental ...




(I think this guy might be a suitably sympathetic solicitor ... https://www.blakemorgan.co.uk/people/john-shallcross/ - he does Q&A on the Zoopla blog at https://www.zoopla.co.uk/discover/buying/q-a-new-3-stamp-duty-surcharges/ as well as the case studies linked above)
Most of the stuff I say is true because I saw it in a dream and I don't have the presence of mind to make up lies when I'm asleep.   Bryan Andreas