Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Flip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

Property/DIY

Join our Property forum for renovation, DIY, and house selling advice.

Flip

Original poster

Advice on selling a home ASAP after getting ownership

25 replies

FromTheAshes13 · 29/12/2017 15:07

I need some advice please...I'm currently living in a maisonette-flat that in principle I've bought from my soon-to-be-ex (he owns it and was renting it) from my half of the value of our shared house...it has yet to go into my name legally (long confusing story) but after being there for 5mos I'm ready to get the h* out. At the time I didn't have much a choice but now I'm in a better financial situation and want to get into a proper house, better area, etc. We've not enough space, I'm paying for a storage unit in the town over, too close to a main road for my cats to go outside so they've reverted to indoor cats. The flat upstairs (renting) are noisy and there's no sound proofing or insulation between my ceiling and her floorboards...I can literally hear her phone vibrate and tones go off, talking, stomping around, furniture being dragged around...surprisingly her washing machine is quieter when it's going than they are. Despite politely speaking to her face to face several times then going to her letting agent, it carries on and it's have proper mental and emotional effects on me. I was planning on doing it up and selling it at least 2yrs from now but there's no way I can make it that long LOL

Anyway, long story short...how soon can I look to sell this once it is in my name legally? I've already found a 'dream home' that I can some money down for and so far it seems I could get a mortgage to cover the rest until the flat sells. (no rent or mortgage on the flat where I am currently). How much would I be shooting myself in the foot if I put down and (hopefully) purchased another house before I can sell this one? WeBuyAnyHouse.com have said they'll happily buy it, so if push comes to shove....

But obviously I'm worried about any capital gains tax I've heard of or other fees/charges for selling so quickly after 'officially' purchasing it. Obviously I'd give better, nicer reasons for making the move.

OP posts:

WildRosesGrow · 29/12/2017 15:17

I think you have to wait 6 months after buying it to sell it. However you would be able to put it on the market before then, just not complete on the sale before then.

Capital gains - will you be living it in at some point after buying it? As long as it has been at some time your main home (Principal Primary Residence), then the last 18 months of ownership will be exempt from CGT, so if you own it for less than 18 months overall, no CGT will be payable. However if you buy it in order to sell it at a profit, putting it on the market as soon as you move in, then this can be seen as not genuinely 'living' there. It doesn't sound like this is the case though, as you are already living there.

The 6 month 'rule' BTW is because potential buyers will find it difficult to get a mortgage on it, if the current seller has owned it for less than 6 months. If you find a cash buyer, then this is less of a problem. You are likely to be asked though, why are you selling so soon after acquiring it? The answer is because of the noisy neighbour, this is not a great selling point. If you lie, then you can be taken to court in the future.

It might be better to stay there for a few months after ownership, then let out the flat and rent somewhere for yourself and your cats. I know this is a bit of a pain but it would be the best way to maximise the selling price, as otherwise you may well have to accept a low price, because of the negative circumstances.

WildRosesGrow · 29/12/2017 15:18

NB if you buy and sell a property within 12 months, then it may be seen as 'trading' rather than a usual domestic property sale, in which case tax would apply. You could probably demonstrate by your circumstances that this was not your intention but worth bearing in mind.

ForgivenessIsDivine · 29/12/2017 15:42

CGT or tax on the profit if it is considered trading will only apply if you make any profit, which by the time you have included solicitors and estate agents costs, may well amount to very little.

If it has yet to go into your name, can your ex sell it instead? Might be simpler..

BubblesBuddy · 29/12/2017 15:57

I think you can sell when you want. People die soon after they move home and no-one says their relatives cannot sell because of someone else’s mortgage. The mortgage is on the property and nothing to do with the vendor. Otherwise how would new homes be sold?

Regarding CGT. If this is your main residence, you could sell it and then move. That way there is no GCT. If property prices are stagnant, and it becomes a second property where CFT could be payable, GCT is unlikely because there is no capital gain. You also have an allowance for CGT each year anyway. Ask an accountant about whether you would have to pay CGT, but if it’s been your main residence, then no CGT in my view.

It only becomes a second property if you buy another one without selling the first one. However, it may be a second property for a very short length of time, so CGT is unlikely in that scenario as well unless it makes a lot of money above your annual
allowance.

So I think you can sell and buy without too much worry.

BubblesBuddy · 29/12/2017 16:01

“Trading” has nothing to do with it. CGT is paid on a capital gain. Could be shares or property. You can buy and sell what you want but you only pay tax on the “gain” above the allowance. There has to be a gain. Whether you sell and make no gain is of no interest to anyone.

WildRosesGrow · 29/12/2017 16:01

"I think you can sell when you want. People die soon after they move home and no-one says their relatives cannot sell because of someone else’s mortgage. The mortgage is on the property and nothing to do with the vendor. Otherwise how would new homes be sold? "

There are guidelines for lenders, which include exceptions to the 6 month 'rule', specifically in the case of bereavement, however I assure you that in general it will be difficult to sell a property within 6 months. The guidelines are linked to money laundering laws, which are stringent and as a consequence lenders are conservative. If you google, then you will find examples of people who have been unable to buy a property in these circumstances, when lenders have refused a mortgage.

WildRosesGrow · 29/12/2017 16:07

"“Trading” has nothing to do with it. CGT is paid on a capital gain. Could be shares or property. You can buy and sell what you want but you only pay tax on the “gain” above the allowance. There has to be a gain. Whether you sell and make no gain is of no interest to anyone."

If someone buys and sells a property in less than 12 months, it is most likely that they are a property developer. In this case, the profit can be seen as trading income. Only informing the OP of HMRC guidance on the matter.

In this case, the OP is not a property developer, however it is possible that she would have to demonstrate this, in order to avoid being assessed as one. I wish people who just have an ad hoc opinion, ratherthan any knowledge or experience in this matter, wouldnt post their opinions as fact. But then if the OP wanted reliable advice, then they would be best to pay for it.

Original poster

FromTheAshes13 · 29/12/2017 16:17

I'll be getting 'reliable advice' as I don't want to end up hanging myself by rushing into things but wanted to ask advice from people who've done similar things.

OP posts:

WildRosesGrow · 29/12/2017 16:25

It is a fairly unusual thing to do, so the best way to find similar cases is to google it TBH. Moneysavingexpert forums are a good place for anecdotal advice on subjects like this.

specialsubject · 29/12/2017 16:28

I would guess your big issue would be finding a buyer - when asked why you are selling, the answers may put people off.

Mrsmadevans · 29/12/2017 17:25

I inherited a house. I had it registered in my name Sept 19th and soldi t the 27th October. I think as long as you are the registered owner you can sell it when you like. Problem being registering it in your name will take a little time.

Mrsmadevans · 29/12/2017 17:27

They hurried up the registration because I had a cash buyer no chain.

Caroian · 29/12/2017 19:42

The one thing that no one else appears to have mentioned is that if you buy the second property before selling the first and the second property is liable for stamp duty then you will have to pay it at the higher rate. You can claim the higher rate part back if you sell the first property within 3 years of purchasing the second.

BubblesBuddy · 30/12/2017 01:58

The 6 month “rule” appears to be an urban myth but is more likely to be invoked by mortgage lenders for BTL purchasers. Less likely for main residence purchasers. Regarding trading, clearly the op is not a property developer. She presumably doesn’t buy and sell property regularly. If she has to pay income tax, then it would be on profit. If there is no profit, there is no tax to pay. HMRC May treat an early sale as trading but in effect it isn’t of interest if there is no profit. In all cases, if money is made on a second property, there could be tax to pay but if no profit is made, then there is no tax to pay but the pool of buyers could be smaller if BTL are put off because their mortgage terms are stricter. No problem if they are cash buyers of course.

OctoberOctober · 30/12/2017 17:27

As someone further up said, if it is still in your ex's name, can you just get him to sell it and you use the proceeds to buy somewhere else? Presume they would be a slight legal fees saving on this too. Depends how well you get on with him though and if you want to drag out further though I guess. Good luck.

WildRosesGrow · 30/12/2017 19:48

"I inherited a house. I had it registered in my name Sept 19th and soldi t the 27th October. I think as long as you are the registered owner you can sell it when you like. Problem being registering it in your name will take a little time."

As I've already said, the mortgage lenders' guidelines, which caution against allowing lending against a house that has previously transferred ownership less than 6 months previously, make an exception for when a house has been inherited. However the 'urban myth' that other posters are dismissing does on occasions mean that potential buyers will be unable to get a mortgage.

As I and others have said, you will be asked why you want to sell so soon. This would be as much a problem for a cash buyer. Information about property ownership is in the public domain (Land Registry) so they will be able to see how recently you have become the owner. The Property Information Form, that any buyer's solicitor will ask you to complete, asks about neighbour problems. If you do not disclose the issue, then you can be taken to court after completion (again google it if you don't believe me).

It really would be much simpler if your ex were to sell the property and give you the money but I guess there are reasons why you cannot deal with it this way.

WildRosesGrow · 30/12/2017 19:51

"I inherited a house. I had it registered in my name Sept 19th and soldi t the 27th October."

NB there was no need to transfer the inherited house to your name, it could have been sold whilst still in the deceased's name, as is usual with probate properties. This saves on unnecessary paperwork and fees. I have done this with the sale of 3 properties in the last few years (executor on 3 family bereavements).

Angryosaurus · 30/12/2017 21:25

I think bought from soon to be ex is a good enough reason to be selling (quickly). CGT will no way apply if bought and sold so quickly. Agree it may take 6 months for buyers to get a mortgage but it may not. Get it on the market now :)

Viviennemary · 30/12/2017 21:34

I too was under the impression you can sell a house as soon as you like and no tax will be payable unless you buy it as a second home. And even then you have to make a profit. Do you need to actually buy this flat. It doesn't seem a very good selling prospect with those noisy neighbours. Why can't your ex sell it and give you half.

OrinocoDugong · 31/12/2017 05:47

You would be better off not taking possession of the house but getting the ex to put it on the market, if he would cooperate. He would have to be involved in the exchange of contracts the day that everyone in the chain signs for the transaction to occur as he could destroy the chain and cost everyone thousands if he didn't hand over the money immediately.

Original poster

FromTheAshes13 · 31/12/2017 08:57

I’ve been living in the flat since July & can prove such so it is my primary residence but my name is still on the family Home deed too so were gonna do the deeds together, name off the house & onto the flat. I was planning on living here till my son went to Uni (5yrs) but apart from upstairs, I do need more space, closer to work, etc. Plus, I’d worry he’d only give me what the flat was valued as in our papers if it sold for more than that. I’m gonna do it up some & not rush it just yet but this wasn’t an ideal move as it was necessity & not much other choice at the Time due to finances & such.

OP posts:

Mrsmadevans · 31/12/2017 09:42

"I inherited a house. I had it registered in my name Sept 19th and soldi t the 27th October."

Viviennemary · 31/12/2017 10:01

I read your post again. Are you getting advice from a solicitor because it doesn't seem a good idea to buy this flat. You may not be able to sell it easily at all and you could make a loss on it. You should think again. I hope your ex isn't pulling a fast one here. You've agreed to buy it on some sort of deal with him. Make sure you're not the one who is losing out.

Original poster

FromTheAshes13 · 31/12/2017 14:17

That’s what I’m afraid of.

OP posts:

Viviennemary · 31/12/2017 14:57

You have to think again and not go through with this. And you have your eye on your dream house. What if the flat takes months to sell and you make a substantial loss and won't afford anything decent. No it's a crazy idea. If it's in your Ex's name he must sell it and not to you.

Flip

Swipe left for the next trending thread