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Where Taxpayers and Advisers Meet

SDLT when selling and buying

bbq2202
Posts:2
Joined:Fri Jul 14, 2017 4:48 pm
SDLT when selling and buying

Postby bbq2202 » Fri Jul 14, 2017 4:59 pm

Hi all,

I own a BTL that I purchased in 2012 and I bought my first residential property in April 2017 so I paid the extra 3% stamp duty. What happens if I sell my residential and buy a new residential? I believe I will always have to pay the extra 3% as I do not plan to sell my BTL, but will I be entitled to a SDLT refund on the residential property that I sell to buy the new one (for the extra 3%)?

Thanks!

SDLT Geek
Posts:232
Joined:Sun Apr 30, 2017 5:45 pm

Re: SDLT when selling and buying

Postby SDLT Geek » Sat Jul 15, 2017 8:51 pm

It does not work quite the way you suggest.

You cannot expect to get back the SDLT surcharge you paid on the property you bought in April 2017. You say that was the first property you have had as an owner occupier, so the exception from the surcharge for the replacement of an only or main residence cannot apply to that. Selling the property acquired does not allow one to reclaim the surcharge paid on its acquisition.

But potentially when you sell the April 2017 property and buy a new property intending to live in it as your only or main residence, you could escape the surcharge on the new property, as notwithstanding your ownership of the 2012 let property, you might be able to rely on the replacement exception.

The reason that I say "potentially", "could" and "might" is because you only bought the current property in April 2017 and you are already planning on selling it. Have you really lived in it as your "residence"? Did you move in anticipating a degree of permanence and an element of continuity? If so, what life changing event has occurred since you bought it that you are already planning to sell it? Or was it only ever intended as a stop gap short term place to stay?

bbq2202
Posts:2
Joined:Fri Jul 14, 2017 4:48 pm

Re: SDLT when selling and buying

Postby bbq2202 » Mon Jul 17, 2017 10:03 am

Thank you SDLT Geek! I'm not planning on selling my residential just yet but I hope to in a year's time - it's quite a small flat but it was all I could afford at the time (in greater London) and I only ever intended to live there for a couple of years at most. I will remortgage my BTL next year and I plan to borrow more against the BTL to help with a deposit for a house.

That makes sense, if I can escape the surcharge on the new property that would be great! I thought only people who owned more than one property before April 2016 would be able to use the replacement exception.

Thanks!


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