Stamp duty question

[GoBrookeYourself]

Hi,

Any clarity would be greatly appreciated! DH and I both have a house on BTL at the moment and also have our home we live in which is mortgaged. We bought it about 2.5 years ago and paid around £6000 stamp duty as it was a second home and are now looking to move.

I’ve been reading about claiming stamp duty back if you sell your main residence within 3 years of buying another main residence, but it’s confusing me a little. So the new house will look to have stamp duty of around £7500, but does this mean if we sell our current house, we’ll get the £6000 back as long as we sell within 3 years? Or is it only if we don’t own any BTLs?

Thanks in advance!

You can claim back if you are selling and buying your main home regardless of how many btls you have

Thank you alexalee- so would it be the £6000 we’d be claiming back?

No... If the amount you pay should be 7500 then you will have to pay an extra 3% on top of that and claim that back

Sorry, you’ve lost me a little. The stamp duty based on the second home charge for the new house will be around £7500, so what will we be claiming back? Why would we pay 3% on top of that?

Ah wait I think I understand. So on the old rules, stamp duty on the new house would have been 3%, so we’ll be claiming the difference between £7500 and what it would have been at 3%?

I don’t believe you can claim back the stamp duty paid in your circumstances. I think you can claim back if you buy a new property as your home but have not yet sold the previous property you used as a home. In your case, though, if you are replacing the property that is your home, you don’t need to pay the 3% charge.

It’s complicated and not entirely fair, but as I understand it, that’s how it works. No substitute for proper tax advice though.

Sorry to clarify no 3% charge on future property that is your home (provided you are replacing your main residence) but can’t claim back what you have paid on your existing property.

Ah right zsazsajuju, so what would happen if we sell and buy at about the same time, which is what we’re hoping to do? This is all so confusing!

You can’t claim back the £6000 stamp duty you’ve paid on the house you’re currently living in. My understanding is that if you sell the house you’re living in, and replace it with another main residence, you will be required to pay the 3% surcharge at the time of purchase, but you can then claim this back.

If someone already owns more than one property, and they sell their main residence, they won’t have to pay the 3% stamp duty surcharge if they buy a new main residence within 3 years

This is from the gov site.The surcharge only applies if under 3 years for main residence. It also implies you don't need to pay the surcharge upfront and claim it back but your conveyancer will confirm.

lifebegins50 I think the 3 years is the time you get to sell the old house after you buy the new one. From what I can gather it’s from the date of completion of buying the new house

LadyGrey66, thank you for replying, I think I’ll give our solicitor a call tomorrow to ask- it’s quite a bit of money so determines what deposit we’ll put down on the new house as we like to have x amount in savings as a buffer, so I’d like to know in advance so we can plan around it.

Thank you all for replying.