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Changing primary residence and stamp duty tax

(11 Posts)
duriandurian Wed 24-May-17 21:15:31

Can anyone point me to a dependable source re: the new stamp duty?
Our question is: if we buy a smaller house to live in for a year and then our, bigger dream house, comes up, can we swap primary residence and so pay lower stamp duty on the bigger home rather than having to sell the smaller one to do this? Am worried that markets will plunge after we finally manage to buy somewhere.
We have some spare money, we have spent 15 years kowtowing to unreasonable landlords. Currently jammed into a house with dodgy gas warning signs everywhere and glazed with greenhouse glass so we would be awesomely nice landlords as we have a lot of bitter experience. No bigger homes coming up in our search area (Brexit/election maybe) but quite a few smaller ones which may well do forever but if it didn't I want to know if I have to pay the extra tax.

GETTINGLIKEMYMOTHER Thu 25-May-17 07:59:43

I'm pretty sure it's the case now that you have pay the extra stamp duty on any 2nd property, whether you call it your primary residence or not. However if you then sell one of them within a set time (30 months?) you can claim the extra SD back.
If you keep no. 2 you can't.
Google will point you at the official information.

senua Thu 25-May-17 08:11:04

I tried googling yesterday and couldn't find anything about swapping. All I could find was a comment from saying your primary residence is a 'matter of fact', i.e. not a matter of election (like you can do for principal private residence for CGT purposes).

duriandurian Thu 25-May-17 08:17:49

Yes, Google didn't help me feel like I understood the matter any better which i why I asked the mumsnet oracle.

duriandurian Thu 25-May-17 08:19:47

But thank you for the matter of fact vs matter of election finding. Sounds like we may need proper legal advice.

RebelAllianceUK Thu 25-May-17 08:29:49

I can't link to it now, but you need to read the HMRC guidance notes on this. It's a downloadable PDF and contains every detail you need. It will be on site.

Rather worryingly, I understand some conveyancing solicitors are still not up to date with all the ins and outs, so it's very much up to you to point out if you're entitled to an exemption, else they'll force you to pay.

You may need to reference the particular clause in the HMRC document applicable to you if you are exempt to prevent that from being pursued.

peppatax Thu 25-May-17 08:32:17

GETTINGLIKEMYMOTHER is right as we've just done this. We can claim back the additional stamp duty if we sell the original property within 30 months.

All second properties are subject to the additional stamp duty regardless of purpose, even overseas properties.

senua Thu 25-May-17 08:39:29

It's 36 months, not 30 months.

All second properties are subject to the additional stamp duty regardless of purpose, even overseas properties.

I don't think that is right. SDLT is only due on properties in England Wales and NI (Scotland has a different system, LBTT). However ownership of all properties - home or overseas - is taken into account when deciding how many properties you own.

DancingLedge Thu 25-May-17 08:40:43

My understanding is that it's about owning two houses.
The thing that matters about the change of your primary residence, is that you can have this 'overlap', where you buy your next residence, before you sell your previous one. You pay the 2nd homes rate of stamp duty, but can then reclaim that 'extra'amount, if the first house is sold within 36 months.

No reclaim mechanism exists if you just keep the first house.

The change of main residence is about replacing a main residence. That necessarily involves selling the previous one.

MugwumpSupreme Fri 26-May-17 06:55:03

Dancing is right. If you keep the first house you pay increased stamp duty on the new house. There's no possibility of claiming the new one as your primary residence.

duriandurian Fri 26-May-17 19:29:29

Thank you all. It Ma kes sense I guess as it will result in FTB type properties being sold on, not being kept as rentals.
Shame tho' for us as we are wasting this glorious summer with no real garden or many windows that open wide.
Still next year will be amazing if we find our own house!

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