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Which property do I pay additional SDLT

Mike5352
Posts: 2
Joined: Sat Jul 15, 2017 11:22 pm

Which property do I pay additional SDLT

Postby Mike5352 » Sat Jul 15, 2017 11:34 pm

Hi,
Apologies if this has already been covered, this is my first time posting here.
I own a small studio flat worth around £70,000. It is rented out to a tenant.
I rent my main residence with my wife.
We now want to buy a house to live in (worth around £5-600k. I plan to put the studio flat on the market, however it might take some time to sell.
Should it not sell and we go ahead with the purchase of the house, I understand we shall have to pay the additional SDLT (we could get a refund if the studio flat sells within 3 years, however we'd still have to pay the additional SDLT upfront).
My question is, for which property will we be charged the additional SDLT?
In my opinion it would be fair to have to pay the additional SDLT on the property which is rented out to a tenant and not the property we buy and live in (main residence). However, I have a sad feeling that this may not be the case?
Any help very much appreciated! Many thanks,
Mike

AnthonyR
Posts: 174
Joined: Wed Feb 08, 2017 2:33 pm

Re: Which property do I pay additional SDLT

Postby AnthonyR » Sun Jul 16, 2017 1:17 pm

You only pay SDLT on the purchase of a property, so it won't be the rental you pay SDLT on as you are the seller not the buyer. You will pay SDLT on the new home you purchase.

If you own the rental still at the point of purchasing the new home then you will pay the extra 3%, if you don't you won't.

If you pay the extra 3% then sell the rental property you will not be able to reclaim it as you will not have sold your previous main home.

So failing to sell the rental first will result in an extra £15-18k which you will not be able to reclaim.
Anthony Rogers CTA
Fusion Partners LLP
anthony@fusionpartners.co.uk

Mike5352
Posts: 2
Joined: Sat Jul 15, 2017 11:22 pm

Re: Which property do I pay additional SDLT

Postby Mike5352 » Mon Jul 17, 2017 1:11 pm

Thanks very much Anthony. It appears to be even worse than I expected :(

maths
Posts: 6894
Joined: Wed Aug 06, 2008 3:25 pm

Re: Which property do I pay additional SDLT

Postby maths » Mon Jul 17, 2017 4:02 pm

If the small flat was at anytime in the 3 years prior to the acquisition of your new home your only or main residence then on its subsequent sale the 3% would be reclaimable.

Have you not at anytime had a residence which you have sold (eg a residence prior to the acquisition of the flat) ?


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