SDLT implications for landlord relocating?
I’m a landlord with a small portfolio who is looking to sell my primary residence (as far as HMRC are concerned) and relocate to the south coast into a higher value property. The option of simultaneously selling and buying, although it can solve some problems, comes with its own challenges, and so I wanted to look at alternatives.
Having cash, I felt, would also give me more benefits when coming to buy. The options I have are either:
1. I could sell my house and move into one of my smaller B2L flats for a few months whilst we search for a new primary residence. This would then return to my B2L portfolio. The drawback is I’d still be a distance from the house-hunting areas I’d like to be in, though the logistics of putting a roof over our heads would be simpler
2. Move to the south coast area and rent for say 6-9 months to get the best deal I can. The drawback would be the hassle of being a tenant again; checks, deposits, contracts etc.
As I want to avoid the extra 3% SDLT on the purchase of what will be my new primary residence I wanted to know if there would be different SDLT implications of choosing either option. Am I missing something? Could there be better options? Other factors I haven’t thought about, e.g. CGT?
Thanks in advance
Edward
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Member Since February 2011 - Comments: 3453 - Articles: 286
9:40 AM, 6th August 2020, About 6 years ago
Hi Ed,
If you purchase a new main residence you will pay the 3% surcharge for a second home if you do not sell your existing main residence.
However, if you do then sell the old main residence within the next three years you can claim a refund on the SDLT surcharge.
Member Since July 2017 - Comments: 462
11:26 AM, 6th August 2020, About 6 years ago
You could purchase you new residence first, being in a good bargaining position with nothing to sell, funding it via a B2L mortgage. Then rent it out for 18 months or 2 years. Towards the end of this period sell your existing main residence and then move into your now empty new property. Then claim back the 3% extra SDLT on your your B2L as you will then be making it your main residence.
Member Since February 2015 - Comments: 29
11:42 AM, 7th August 2020, About 6 years ago
Reply to the comment left by at 06/08/2020 – 11:26
Thanks silversurfer .. I hadn’t thought of that one. That’s why this community is so good!