Is this a dream or could I really do this?

[Mysteriousgirl2]

We’re a family of 5 living in a large detached house in the countryside.

Massive problem: the schools are really poor.

We’ve got enough money to buy a house in a better area for schools. However, our main house still needs work before we put it on the market (the work will take about 2 years). Eldest DC will start a new school before then.

Recent inheritance means we’ve got some money (but not enough to send DC to private school). We are considering buying a temporary, smaller house to get into the catchment area in time, do up our main house over the next two years, then sell it and buy our forever home. Is this crazy/ a good idea/ sheer lunacy?!

Just in case anyone thinks we are playing the system, we fully intend to move permanently to the new area. It’s much nicer, with great schools and we’d be contributing fully
to the new area, both working etc. We would be properly moving to the smaller, temporary house.

We realise that we’d need to pay bills for both houses and extra stamp duty and we’ve factored that into our calculations as well.

If we wait until the main house is done, it will be too late for getting into the good schools as they are oversubscribed so in Year transfers do not happen.

Bumping

I'd sell the house without doing the work and buy in the area I wanted to be in.

Would love to do this but DH refuses. He’s been building this house for 4 years and it needs a decent finish to get what it’s fully worth.

I feel trapped by it, though.

You know your finances best - not us. If the finances all work out and you and your family are happy with the move then go for it. Just make sure all the DC are okay with going to new schools as they can get attached even at that age.

If they are happy then again, go for it.

You need to think about capital gains tax too. I'm not sure of the timelines but I think that if you buy a new home without selling the old one there's only a certain amount of time to sell the old one before it loses its CGT exemption.

@StressedMumOf2Girls thank you I agree. It feels like this works for us and suits our family, although others might think it’s lunacy.

@ASimpleLobsterHat thank you for raising the CGT issue. My understanding is that you only pay that on the appreciation of your main home, so whenever we sell the big house it will be payable anyway, whether it’s now or in two years.

No, while CGT is technically payable on the sale of any property you get private residence relief on for your only or principal home. So if you sold you house and bought a new one at the same time then you would not pay any CGT. I think that there is a certain amount of overlap allowed and you can still qualify for the exemption, but 2 years might be too long. You should speak to an accountant as you might find that the uplift in doing the work to sell at a higher price is cancelled out in the extra tax paid.

For admission purposes you would have to prove that you actually live in the catchment area, I.e. that you use it as your primary residence and that's what your council tax says.

If you can do that then you should be fine.

Second home stamp duty and council tax. What happens to siblings when you have moved back, some are not given priority over in-catchment/closer applicants. Some LA will not take a recent new address into account for allocations if another property is owned within a reasonable distance ie. It is assumed to be acquired to gain a school place with an intention to move again,

If it works for you financially, do it!

Would all the children move to schools in the new area?

Do look carefully at the CGT issue though. As I understand it CGT would be due on the increase in value during the time it is not your main residence. I.e after you move to the temporary house. And if it is being done up the rise in value will be a lot.

If you were to stay in it as your main residence, sell and move into your next main residence there would be no CGT.

Buying and selling is expensive, conveyancing, surveys, Stamp Duty, EA fees, and VAT on every set of fees. You are proposing to buy and sell twice to get your forever home? With all the increases entailed in a second home and potentially CGT?

But if it works for you, do it.

We are not intending to move back. We need to move to the better area and then sell our house. Once there, we are staying within catchment.

@VineRipened yes all the DC would be moving to new schools.

I agree with you about the two sets of sales in terms of expenses - that’s a lot of fees right there.

What about renting in the new area? If short term, might be cheaper than fees / risk of house prices going down.
Or would it be possible to buy somewhere that you could rent when moved?

Yes I think we could buy somewhere and then rent it out when we don’t need it @Chewbecca

We've considered renting somewhere but there’s a real shortage of properties available locally. Plus, the school admissions really don’t like it when people own a property elsewhere and rent one to be in catchment.

Also, an update: we went to view a property yesterday. It was expensive and tiny and we were both really shocked by what you get for the money. I don’t know where we’ll go from here to be honest.