Renting or buying main residence while on second build?

Renting or buying main residence while on second build?

10:03 AM, 6th June 2022, About 3 years ago 11

Text Size

Hi all and thanks for having me on the forum. I am a first-tie developer having sold my London property and with £450k in the bank, I bought some land in Kent and obtained FPP.

I have just finished building the house which has been valued at around £1-1.2 M. I did need to borrow £100k to finish the property, a loan secured on the house.

I am now planning a second build, however my partner doesn’t want to rent whilst the new house is going up and has suggested that we buy a flat outright (for around £300k), to give her a sense of permanency, which we could also use as a security if we run out of money to build.

My question is in regards to CGT are we better off NOT having that theoretical flat and renting for 18 month thus circumventing CGT (legally) or is it an asset?

We believe that we can make another profit of around £400k with the opportunity we have in mind. So renting isn’t a bad option. Any thoughts at all?

Many thanks.

John


Share This Article


Comments

CMS

Become a Member

If you login or become a member you can view this members profile, comments, posts and send them messages!

Sign Up

12:15 PM, 8th June 2022, About 3 years ago

Reply to the comment left by Ian Narbeth at 08/06/2022 - 10:01
Agreed. I was working on the basis that the house would be sold for £1.2 million and John would not move into a flat until he has sold this so that there is no break in his occupation of the £1.2 million house as his main residence. That being said i have in the back of my mind that you can claim a previous house is your main residence for CGT purposes for a period of time after you have moved out but (a) don't quote me on that; and (b) don't ask me what the time period is!

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Automated Assistant Read More