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Where Taxpayers and Advisers Meet

Claiming stamp duty on buy-to-let vs residential mortgage properties

ConfusedLandlord
Posts:1
Joined:Fri Jan 31, 2020 10:56 pm
Claiming stamp duty on buy-to-let vs residential mortgage properties

Postby ConfusedLandlord » Fri Jan 31, 2020 11:04 pm

Dear Experts,
Can you please read through and help me.

I bought Property A in 2014 Apr (residential mortgage - first property and only owned property then)
Lived there until Jan 2017 ( 34 months)
Due to a change in job location, I moved out to another town and lived in rented accommodation until Jun 2019 and rented out Property A
Property A was on rent from Feb 2017 to current date (35 months)

As the new town where I live now continues to be my home for a foreseeable future, I have bought Property B in Jun 2019
Property B was also bought in a residential mortgage as was planning to sell Property A at some point in time this year. Paid double stamp duty on property B as it was considered 2nd home
Both the properties mortgage are coming up for renewal in Apr 2021

So if I continue to hold Property A, it has to be moved to buy to let mortgage
I am thinking of selling Property A now as I would like to offset a portion of home loan on property B
---
Question 1
1. If I sell Property A now, can I claim stamp duty relief on Property B considering its within 3 years of time since property B was bought?

2. If I continue to hold on to Property A, as the market prices as down, and sell after Apr 2021
i.e., after when I have moved it from residential mortgage to buy to let mortgage, is there a difference in Capital Gains Tax for a property on buy to let mortgage vs a property
which is on residential mortgage

3. Is my situation getting worse off by holding on to Property A, as the duration of the period in which the property was rented out will grown to be greater than the duration of the period in which I have lived there?

4. Am I missing anything else to be considered?

Can you please share your feedback

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Claiming stamp duty on buy-to-let vs residential mortgage properties

Postby AdamS93 » Sat Feb 01, 2020 4:26 pm

1. yes.

2. The mortgage is irrelevant. The gain is the proceeds from sale less purchase price (in the simplest form) and you will get some PPR relief. However from 6th April 2020, letting relief will no longer be available and PPR relief will be more restricted meaning you will pay more CGT if you sell after 6th April 2020.

3. It depends, you would need a crystal ball. Don't put your tax blinkers on. If you think the property price will increase enough to cover the additional tax, then you will be better off. If property prices remain the same, you will be worse off from a tax point of view.

4. Arrange an appointment with a local tax adviser.


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