Would I need to pay additional stamp duty for second homes

[Owlsz]

Hi All
I currently own House 1, it's my only home and I don't own any other property. I am buying House 2 and House 2 will become my main residence.
Would I need to pay the 2nd home stamp duty charge of 5% on my purchase of House 2?

Thanks

Yes.

But house 2 will become my main residence

Yes if you still own House 1.

However if you sell House 1 within a certain time frame you can reclaim the excess SDLT.

You need to sell your main residence to not pay the surcharge.

If you're selling the first house then no, but if you're keeping it then you will have to pay extra stamp duty

But if you sell House 2 in future to move into House 3, then you wouldn’t have to pay the surcharge on House 3.

You have to pay the extra. If you then sell the first house within a certain time you can reclaim.

It depends on how much second house costs, it may be 7.5%. There is an online calculator to work out how much you will pay.

Irrelevant. Which ever one you live in, unless you sell 1 to buy 2. you own 2 properties.

https://www.gov.uk/stamp-duty-land-tax/residential-property-rates

Thanks All

Do you plan to sell house 1 after you have moved into house 2? Because if you sell it within a certain timeframe you can get the second home stamp duty reimbursed. However if you plan on keeping house 1 than no, you have bought a second home and you can't flip them like an expenses fiddling MP. 😉 😁

We did this in the summer, we purchased our new house and then sold the old one a month or 2 after. We paid the extra stamp duty for a second home and then as soon as we had sold the old one we went online to request the stamp duty refund, filled in an online form on government gateway and then received the money back after 3 weeks, surprisingly simple.

It does mean you need extra cash now though to physically pay it. But you have 3 years to sell the old home to be able to get a refund. If you keep both houses then sadly the new one would count as your second home and you can’t get the money back.

What are your plans for House 1?

the answer to your question is very simple, there are only 3 possible scenarios in this case as you currently own only 1 property which is your (current) main residence:

1. Complete the sale of house 1 AT THE SAME TIME as you complete the purchase of house 2 = NORMAL rate SDLT applies. (This is the most common way of house buying chains operating)
2. Complete the sale of house 1 BEFORE completing purchase of house 2 = NORMAL rate SDLT applies to the purchase of House 2.
3. Complete the purchase of House 2 BEFORE you complete the sale of House = HIGHER rate SDLT will be charged on House 2 purchase price

If scenario 2 applies, then you can potentially reclaim the excess SDLT paid over the normal rate provided that you sell your ex main residence (House 1) within 3 years of the completion date of the purchase of House 2. If you miss that deadline, then you cannot claim a refund.

Higher rate applies where you are NOT "replacing" your main residence with another property that is your main residence. This is called Condition D
It is not just a question of how you use the property, it is also a question of how many properties do you simultaneously own
Scenario 1 - you start with owning 12, you end the day with owning 1
Scenario 2 - you own 1, then you own none, then you own 1 again. You have replaced the main residence. This assumes you do not own another property in between - you can of course live in a rented property between sale and purchase.
Scenario 3 - at the end of the day you own an additional property hence the additional rate applies as you have gone from owning 1 to owning 2 properties

Hence in scenario 3 no replacement has (as yet) taken place. "Replacement" only arises with you finally sell off the previous main residence (subject to the time limit).
SDLTM09800 - SDLT - higher rates for additional dwellings: Condition D - general - Para 3(6) Sch 4ZA FA2003 - HMRC internal manual - GOV.UK

So will need to pay and reclaim the higher stamp duty within 3 years.

You can only reclaim the stamp duty if you sell house 1 within 3 years or purchasing house 2 and go back to owning just 1 property.

yes, as explained in my post