New stamp duty rules

[ANiceSliceOfCake]

Please can someone confirm something please

My husband & I currently live in a house we own together. We both kept our first homes and rent them out.

If we sell the house we live in for a new house do we have to pay the new additional stamp duty?

I think we do but thought I'd check.

Thanks.

[TheWildRumpyPumpus]

After April 5th this year, I believe so.

[sparechange]

No, if you are selling your main residence to buy a new main residence, you don't need to pay the higher rate
If you buy the new place before selling the old one, you might have to

Sorry for the Fail link, but they've got some useful info and a flow chart...
www.thisismoney.co.uk/money/buytolet/article-3394231/Why-concerned-second-home-stamp-duty-reforms.html

[Bearbehind]

After April 5th this year, I believe so.

Quite impressed such a short statement can be so factually incorrect.

The proposals are due to take affect from 1st April and, as sparechange said, it wouldn't apply to the sale and purchase of a main residence.

[ANiceSliceOfCake]

That's great! So if we change our main residence that's ok then.
Not looking to move yet but I do like to know.

Thank you.

[ABetaDad1]

The Budget announcement on 16 March 2016 will confirm the rules.

[lalalonglegs]

It is odd that the changes come in on April 1st and not April 6th, beginning of new financial year, though. Savills is squeezing in an extra auction on March 2nd (complete March 30th) so that investors can have one last crack at getting a pre-3% property.

[ABetaDad1]

Yes 1 April is a bit of an odd date to choose.

I am buying a property right now and stipulated completion on or before 15 March 2016 in case the new regulations come in at midnight on Budget day.

[lalalonglegs]

Oooh, good thinking, Beta

[dynevoran]

Plenty of accounts are drawn up to 31 March though , as an equivalent to 5 April so it's not too crazy.

What gets my goat is that (similar to child benefit inequitable withdrawal) someone who has a rental property and sells their home and buys a new one doesn't get hit. Someone who buys a new one and rents their old home out does. As with everything this government do, the execution of an already dubious principle is just badly thought through.

[lalalonglegs]

The thing that gets my goat is that the 3% hike doesn't apply to large property corporations .

[ABetaDad1]

Having looked at the consultation document in detail it will add an incredible amount of complexity to property transactions without any significant increase in tax income to the Govt and I suspect very little impact on the main target which is to remove BTL investors from the lower end of the market where first time buyers are unable to afford to buy.

The real solution is to allow house prices to fall - but the Govt and Bank of England terrified this will destroy the banks who have loans/mortgages secured against property. Moreover, falling house prices will not be popular with older voters who have come to regard their house as a source of untaxed pension.

This whole problem of affordability could have bene dealt with years ago if houses had been subject to capital gains tax each time a house is sold (with allowances for inflation and costs incurred in improving the property) and inheritance tax removed completely. Property is extremely lightly taxed compared to all other forms of investment and distorts the economy in dramatic ways. Not only making housing unaffordable for young buyers but also diverts investment away from job creating entrepreneurial business creation.

Why bother taking a risk and being entrepreneurial if your house is making capital gains untaxed each year? Putting additional stamp duty on a 2 bed few flats is not going to resolve that huge distortion or makes housing any more affordable for first time buyers.

[lalalonglegs]

Hmm, I think it will affect the market, at least for a year or two. There has been a clamour to buy before April here in London. I imaginet things are going to go pretty quiet after that and vendorsw I'll also have to be more flexible on price as a consequence. Not a crash in itself but more of a buyers' market.

I'm not convincedt hat charging CGT on propertys ales would have slowed prices - surelyi t would makem ost people reluctant tom ove at all and therefore supply would have become even tighter?