SDLT implications for landlord relocating?

by Readers Question

9:36 AM, 6th August 2020
About 2 months ago

SDLT implications for landlord relocating?

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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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Comments

Neil Patterson

9:40 AM, 6th August 2020
About 2 months 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.

silversurfer2017

11:26 AM, 6th August 2020
About 2 months 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.

Ed Regent

11:42 AM, 7th August 2020
About 2 months 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!


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