This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

FTB But also BTL....help needed

Josephevanrussell
Posts: 2
Joined: Fri Aug 16, 2019 1:04 pm

FTB But also BTL....help needed

Postby Josephevanrussell » Fri Aug 16, 2019 1:18 pm

Hello
I can’t seem to find the correct rate at which I’m supposed to pay, as I’m in a unique situation.

I am not a property owner. I have never owned a property of any sort. I currently rent and will do so for the next 4 years.

I plan to buy an investment “buy to let property” this year to solely let out. It is a house. I will never live in this, it is solely an investment. It is £120,000


In 4 years time I plan to buy another property. This will be my first residential property I buy to live in. I will live in this property. It is a house. This property is £350,000.

In 4 years I will not sell the first property, I will own both at the same time.

My questions:
Which is my first time buyer home?

Is the btl classed as my first home, even though I won’t live in it, as it’s just an investment?

How much stamp duty do I pay on each?

What’s the best way to do this?


The options on the stamp duty website presume btl is a second property, but it will be my first property, yet not the first one I live in.

Please help

(Hope that all made sense)

Many thanks

Joe

SDLT Geek
Posts: 171
Joined: Sun Apr 30, 2017 5:45 pm

Re: FTB But also BTL....help needed

Postby SDLT Geek » Fri Aug 16, 2019 8:00 pm

You will not qualify for first time buyers’ relief on either property. You do not get it on the first as you do not intend to live in it. When you buy the second, well, it is your second!!

The first property will be liable to SDLT at standard rates. On £120k that is zero as SDLT at standard rates starts at £125k.

The rules might have changed by the time you buy the second property. On present rules the extra 3% SDLT would be due. For a property of £350k presently that would be £18,000.

Josephevanrussell
Posts: 2
Joined: Fri Aug 16, 2019 1:04 pm

Re: FTB But also BTL....help needed

Postby Josephevanrussell » Sun Aug 18, 2019 10:16 pm

You will not qualify for first time buyers’ relief on either property. You do not get it on the first as you do not intend to live in it. When you buy the second, well, it is your second!!

The first property will be liable to SDLT at standard rates. On £120k that is zero as SDLT at standard rates starts at £125k.

The rules might have changed by the time you buy the second property. On present rules the extra 3% SDLT would be due. For a property of £350k presently that would be £18,000.

Thanks for your reply. It seems that it would not be worth buying an investment property then, as I don’t expect it to climb £18 within 4 years time.

Any way I can get around this?
Am I right in saying the same rules would apply if I bought the btl through a Ltd company?

Thanks again,

Joe

jerome.lane
Posts: 16
Joined: Mon Aug 12, 2019 8:41 am
Location: Camberley, Surrey
Contact:

Re: FTB But also BTL....help needed

Postby jerome.lane » Mon Aug 19, 2019 9:54 am

Hi,

If you were able to buy your first investment property via a limited company holding structure, you should still be a first time buyer in your own right in four years time. You will need to check the small print, although a company would usually have a separate legal identity. The down side is that companies always pay the additional 3% SDLT (£3,600 on £120,000), have no CGT annual exemption or income tax personal allowance and cost more to run. The upside is that they are good vehicles for long term investment especially if you are a higher rate tax payer. You should get full advice before proceeding with anything like this though....
Jerome Lane
Tax Advisor
jerome.lane@stewartco.co.uk
Stewart&Co.
Chartered Accountants
Telephone: 01276 61203


Return to “Stamp Duty, Stamp Duty Land Tax, SDLT”