Which Stamp Duty for new residential property?

Which Stamp Duty for new residential property?

15:48 PM, 29th December 2015, About 9 years ago 31

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I have a scenario in which I would like to know if the normal or extra stamp duty (second home or buy to let) thresholds will apply. stamp

Currently I have a small number of rented out properties. One of which I have lived in for some periods of time (circa 3 years or more) before I have rented it out.

I am considering going away for a year and will likely rent out my existing residential property.

When I come back I may be looking to purchase a new property as my main residential residence. Will this be subject to the normal stamp duty fees or the ‘second home’ fees. I would appreciate some clarification.

Thank you


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Pam Thompson

11:10 AM, 30th December 2015, About 9 years ago

It is for BTL or 'second homes' which your future purchase would be so I would assume you would be paying the higher stamp duty but it would be interesting to see what others say.

Arun Damodaran

11:15 AM, 30th December 2015, About 9 years ago

As far as I am aware this is a bit of a grey area which has not been clarified in the current of announcements. How 'Let to Buy, gets treated in the new changes will be eagerly awaited. Your solicitor might be able to throw some light on it.

S Hays

11:35 AM, 30th December 2015, About 9 years ago

I would say that as it is to be your main residence, the lower stamp duty would apply!

Adrian Bond

13:34 PM, 30th December 2015, About 9 years ago

I would think as your existing home would be let out under a let to buy mortgage, strictly in your own name, then that would be applicable under the existing residential stamp duty (as you have already paid it). It will stay on this until you incorporate it into a company at which point the higher stamp duty and Capitol gains tax apply.

If you have already got your previous home on a LTB mortgage then you can legitimately buy another residential home for you to live in under the normal stamp duty thresholds which are unchanged.

I am interested in how LTB will be covered by the tax and stamp duty issues as it could alter my own strategy sonewhat. Does anyone have any news on the gov approach to this? E.g is stamp duty payable twice?

Future tax implications with income tax will also play a big part!


Chris Byways

14:00 PM, 30th December 2015, About 9 years ago

I am sure it will be at the higher rate, as proposed.

See https://www.gov.uk/government/consultations/consultation-on-higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties/higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties

Although if of higher value, it might depend on which is your residential address, where do your bills go, and if you are swapping one house for another.

I do have a query, I have not seen covered. A house with an annex, or granny flat, in grounds but not in same building, but can't be sold separately. How is it valued if it was taxable when sold after 1/4/16?

Howard Reuben Cert CII (MP) CeRER

14:03 PM, 30th December 2015, About 9 years ago

You may be aware that the government has now published its initial briefing on the Stamp Duty changes and there are a few surprises to note.

The full document can be viewed here > https://www.gov.uk/government/consultations/consultation-on-higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties/higher-rates-of-stamp-duty-land-tax-sdlt-on-purchases-of-additional-residential-properties

A summary of who pays what and when can be seen in the graphic here > https://whitehall-admin.publishing.service.gov.uk/government/uploads/system/uploads/image_data/file/47781/SDLT-diagram.jpg

The most recent updates in the discussion document include;

if you 'let to buy' and move out in to a new residential property / home, you will pay the higher rate on your new residential home! ..... unless you sell your former home within 18 months of moving and then and only then will you be entitled to a rebate.

The government has also eliminated the option to buy in a Ltd Company name to avoid this surcharge.

Remember the 'hopeful' strategy of owning 15 or more properties and avoiding the SD surcharge? The government has also published that it will be the PURCHASE of 15 properties or more that avoids the surcharge - and not the existing ownership of 15 or more properties.

You need to properly read this for the full detail.

Whatever happens though, we all know that nothing stands still and so we strongly recommend that all BTL'ers conduct a detailed review of their portfolios right now. Inertia could cost you a fortune. We recommend a review on an annual basis (and where necessary, even more regularly than that)

Since we first launched the free property portfolio review spreadsheet download approx 3 years ago on Property118.com, we have assisted hundreds of property investors - can we help you in 2016 too?


If you are buying, don't wait until February! The usual conveyancing, surveys, mortgage, legal enquiries and other delays could push the completion past 1st April and then the additional 3% will be payable.

Contact us now for a personalised review.

Happy new year to you all.

Howard Reuben recently posted...Contact HD Consultants - Mortgage & Protection | Buy To Let | Colchester


14:11 PM, 30th December 2015, About 9 years ago

Thanks Howard, very useful

Laura Delow

15:59 PM, 30th December 2015, About 9 years ago

I'm afraid the HMRC state that if you own more than one property & the new purchase is replacing your previous main residence that is not yet sold, the extra stamp duty is due but you will be able to claim a refund if the previous main residence is sold within 18 months.

Adrian Bond

16:14 PM, 30th December 2015, About 9 years ago

so let me get this straight in my head (appologies).

If i previously had a property which was my home, then let it out under a LTB mortgage - would i then be subject to paying the additional SD on a subsequent residential purchase after april 1st?

If so how far back does this go as i currently have my previous home let under a LTB mortgage which is due for a re mortgage onto a new lenders BTL product (i moved out 18 months ago)?

in time i will want to buy a residential property with my then wife for us to live in for the next 40 years. I dont want to have to pay another 3% SDLT on this as it will be my only residential property (i am currently renting).

we also plan to let out my fiancées current home in order for us to both get a residential home together. will this then also incur the extra SDLT on the future residential purchase together?

Hopefully that makes sense!

can anyone please clarify? Thank you

Kevin Thomson

16:55 PM, 30th December 2015, About 9 years ago

Reply to the comment left by "Howard Reuben" at "30/12/2015 - 14:03":

very useful Howard...but disturbing. Thanks very much!

I had hoped to do a let to buy to a new main residence but will now have to speed things up, if that is possible. We haven't found anywhere yet.

If we can't meet the April deadline, I had thought of switching the one BTL my wife owns with me into my name, put the current residence (joint mortgage) into a BTL in my own name, then buy the new main residence in both our names. This would mean my wife would only own one property - the new main residence.

The new main residence would have to be in joint names in order to qualify for sufficient mortgage.

Would this get round the new legislation?

Thanks for any advice you are able to offer

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