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Stamp Duty - two house situation

(11 Posts)
OldJoseph Wed 01-Nov-17 14:04:27

Ddad has seen a retirement flat he might like to buy. He has enough savings to buy it outright. What he had as a plan was to
1-Buy retirement flat
2-Sell his house
He would do the two things at the same time but he doesn't need the money from his house to buy the flat. In theory the purchase of the flat (it's empty) would be quicker than the sale of his house. The EA has said that doing this way might have implications on stamp duty because the retirement flat would be considered his second home.
Does anyone have any experience of this sort of thing? If there was no way around it I might encourage him to pay the extra stamp duty just so he could have the flat he liked and then deal with the sale of his house. He's fit but old and in the scheme of things the extra stamp duty might just be a bitter pill he'd have to swallow.

Felyne Wed 01-Nov-17 14:06:23

My understanding is the new house will attract a higher rate of stamp duty but you can claim back the difference as long as the first property is sold within three years of the purchase of the second one.

MrMenAndLittleMiss Wed 01-Nov-17 14:14:12

What the previous Felyne said. I'm surprised the estate agent didn't know this.
If he could afford to pay the extra stamp duty (albeit temporarily) it could make the sale and purchase more straight forward. He might even be able to make a lower offer on the flat.

OldJoseph Wed 01-Nov-17 14:49:00

Thanks, I thought the EA might have known more, perhaps he was new. Thanks for your help, I'll tell ddad, it might help him make a quicker decision. He really liked the flat, it would be such a shame not to take it because of a misunderstanding about stamp duty.

CannotEvenThink Wed 01-Nov-17 14:54:17

As has been said, you can claim the extra back, we've just done it.

FinallyHere Wed 01-Nov-17 15:32:11

Sorry, I know this sin't the question you asked, but have you had a look at the state of the market for retirement flats? Unlike other property, it is not unusual to make a capital loss, buying retirement flats.

Your father might like to consider the costs of renting a retirement flat. Kind regards

PestoSwimissimos Wed 01-Nov-17 15:35:51

The Telegraph did a very interesting article about

retirement flats here

trixymalixy Wed 01-Nov-17 15:41:44

we had to pay extra stamp duty as we bought our current house before our old one was sold. If you sell your original property within 18 months (i think!) then you can claims the extra stamp duty back.

I have also heard bad things about reselling retirement flats so i would advise caution.

QuiteUnfitBit Wed 01-Nov-17 16:01:19

Yes re reselling. Read this recent thread

www.mumsnet.com/Talk/property/3066692-Retirement-flat-wont-sell-wolves-at-the-door-desperate

OldJoseph Wed 01-Nov-17 16:29:41

It's for over 55s, I'm nearer the start age than dad, might fancy it myself in a few years.

I don't think he'll want to rent somewhere, he was brought up in rented houses and I'm not sure he'd want to do it again. I'll put it out there for him to think about though.

Dmum passed away a few months ago and dad has been considering his future, and what options are available to him in terms of housing. I like the idea of him buying this flat, if it made a loss after he died I'm not sure it would matter much.

He reads the Daily Telegraph every day so he's probably seen the article.

Thanks for all your help with this.

jmh740 Thu 02-Nov-17 17:25:15

We are in a similar position hopefully will get the keys to our new home next week. Only put ours on the market when the sellers accepted our offer we need to pay the higher stamp duty as officially for a short period we will own 2 houses but we can claim back the extra stamp duty if we sell within 3 years.

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