Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 2 weeks ago 35
We are in the following situation: Have a modest portfolio of BTL properties, but just sold the family home & living in rented accommodation. Was hoping to buy a large family home that we’d like to do a large extension on before moving in. Getting planning permission + architects + builders lined up will take at least a year. Was hoping to buy it on a BTL loan & let it for a year while this was sorted out & then change the loan to ordinary residential when the works start/ or when we move in.
Will we have to pay the extra 3% as long as we move in within 36 months of selling the family home?
My reading of the new SDLT legislation ( https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509184/GuidanceNote_Final.pdf.) is that it hinges on intention:
3.36 The test in respect of the new dwelling purchased is a question of *intention*, does the purchaser intend the dwelling to be his only or main residence? This is a question of intention at the time of purchase, what has the purchaser acquired the property for? The intention test will not only be met if there is an intent to immediately occupy, if some works are to be undertaken before occupation commences then this does not prevent the test from being met. If the dwelling is intended to be put to other uses, for example as a source of income, then the intention test will not be met. There may be rare cases of the purchaser’s genuine intention at the time of purchase being frustrated by events.
Our *intention* is clearly to make it a family home, but I worry that taking out a BTL loan on completion will be considired by HMRC to show a different intention, and that I will have to pay 3% and not get it back when I move in.
Does anyone have thoughts on this *intention test*? Is there a way of proving my true intentions if I take out a BTL loan at first?
p.s. I realise that getting a normal resi loan at completion & then taking out a BTL shortly thereafter might work, but that is not an easy route for us.
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