Stamp Duty Surcharge and incorporation – buying 4th property as main residence

Stamp Duty Surcharge and incorporation – buying 4th property as main residence

10:28 AM, 10th February 2016, About 6 years ago 5

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I have 3 properties. 2 BTL’s which are mortgage free, and my current private accomodation. I have had an offer accepted and in the early stages to moving forward with the legal and mortgage applications for this new property. After the purchase I will have 4 properties. I plan on renting out the property that is currently my private residence.costs

My question is, will I have to pay the enhanced stamp duty if I am buying another property which I intend to occupy as my private residence? Im getting conflicting opinions from my mortgage advisor, legal advisor and people I speak to.

As a second query – Is it worth incorporating the 3 BTL’s prior to 31/3/16? two of the properties are below £150k in value each.. One is c.£200k in value. Will SDLT and CGT apply and how can I get these minimised?

Also, is it too late to get this done by 31/3/16? Presumably I need to involve a solicitor and an accountant?

Thanks in advance everyone.



Neil Patterson View Profile

10:44 AM, 10th February 2016, About 6 years ago

From a previous post by, the Principal of our partner IFA company HD consultants, Howard Reuben >>

The government has published its initial briefing on the Stamp Duty changes and there are a few surprises to note.

The full document can be viewed here >

A summary of who pays what and when can be seen in the graphic here >

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.

With regards to the tax question this is a very individual and complex area so please see our tax page >>

Kate Mellor View Profile

16:56 PM, 10th February 2016, About 6 years ago

Totally agree with Neil regarding the SDLT on your new property being chargeable at the new higher rate if you complete after 31/03/16. Unless you sell your previous home within 18 months you cannot reclaim the additional 3% you will pay.

I'm not sure why you would need to incorporate your existing buy-to-lets which are mortgage free unless you are planning on borrowing against them? I have looked into this one myself and initially discounted it due to the fact that it would require remortgaging so many properties at huge cost due to the ownership changing (I'd literally just remortgaged everything when this was announced!), however, I've now noticed that both Paragon & Aldermore are adapting to the 'new world order' and making remortgages to Limited companies more accessible and no doubt others will also. So I'm now having another rethink. 'Non high street' lenders seem to be becoming more business oriented in their lending approach and stepping in where there's been a void left by the banks.

I believe SDLT would be payable on incorporation, but there is a relief on CGT available if you qualify for it. You can read up on incorporation relief for more details.

It's a minefield all this, and part of me is holding back from making any costly changes as I don't fully believe that such patently unfair and hastily rushed through changes will actually be permanently put in place...

I know my hopes are pure fantasy though as Labour are even worse! It's not even as though you can hope Cameron gets kicked out at the next election and Labour will scrap it - I know they'd only heap on further misery 🙁

Sorry, drifted off into a rant there for a minute...

John Walker

18:37 PM, 10th February 2016, About 6 years ago

Hi Kate,
I think our best strategy is to advise our local Tory MPs that their seats are marginal if under 10,000 majority, and unless they oppose many of GO and Dave's policies several million landlords and tenants will not be voting for them come the next election. Not that Dave may care, he's standing down,

Kate Mellor View Profile

11:00 AM, 11th February 2016, About 6 years ago

Reply to the comment left by "John Walker" at "10/02/2016 - 18:37":

If only I had any faith that these guys gave two hoots!

This BS has only been possible because it affects so few individuals proportional to the population. The general voter is not motivated to care (hence the tiny amount of publicity this has received). It won't affect the way they vote as it doesn't hurt them. You'll note that the govt was careful not to hurt the big players who have some political influence?

These laws are not designed to do what they are pretending (as we all know), but are actually just a vote winner - redirecting anger at the housing crisis away from the real culprits and making small landlords who can't defend themselves the scapegoats. You'll note that the huge international giants who own enormous swathes of property around London & who are more likely to be affecting the house prices there are left entirely untouched...very mysterious!

John Walker

16:29 PM, 12th February 2016, About 6 years ago

Reply to the comment left by "Kate Mellor" at "11/02/2016 - 11:00":

Hi Kate,
MPs are all too aware how vulnerable their position is in these uncertain times. We need to exploit this weakness by constantly reminding them how as landlords (few)and disenchanted tenants (many) our combined votes could unseat many of them. The current Tory majority in parliament is currently quite marginal, and they would much prefer to be in power rather than opposition, or even worse, for them, out of a job altogether.

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