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Can anyone help - question re: stamp on second homes

 
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Tommytink



Joined: 15 Feb 2017
Posts: 11

PostPosted: Thu Mar 02, 2017 2:38 pm    Post subject: Can anyone help - question re: stamp on second homes Reply with quote

Hello,

Does anyone know about the stamp duty on second homes and changing the use of your existing home to a holiday let?

Basically we are considering a move to Wales, but as we live four hours away it seems a little out of reach. We are looking for a property with main residence/land for smallholding/holiday let but realise getting all three requirements will not be easy.

Because we are not close by (and this will be an important purchase which we don't want to make a mistake on) we thought about buying an inexpensive cottage in the area we like, moving into it, and then spending time finding our perfect property with the smallholding and subsequently keeping the cottage to become the holiday let.

Does anyone know, if we do it this way, would we pay the extra stamp duty for second homes?? We would be changing the purpose of the cottage from a main residence to a holiday let but wasn't sure how it worked.

This may be the completely wrong board/site to ask this questions, but wondered if anyone has done anything similar?

Thanks in advance...
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ianh100



Joined: 10 Jan 2013
Posts: 561
Location: Sherborne Dorset

PostPosted: Fri Mar 03, 2017 9:37 pm    Post subject: Reply with quote

Hi, There was some good discussion about this sort of issue last year, I think it could have been on the radio 4 money program.

They were discussing a situation where a couple had their own homes before they met and decide to buy a new home together but keep one of the original properties as a rental. Crazy situation meant they would pay the extra on their new home as they were buying together.

I suspect in your case if you were to sell (assuming currently larger home) to buy a small property you would pay standard stamp duty.

If you then use decide to buy the larger second property it would be a second property so would attract the additional rate. bad news.

I suggest taking advice as you may be able to buy things in the right order to avoid this. Good luck
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Tommytink



Joined: 15 Feb 2017
Posts: 11

PostPosted: Sun Mar 05, 2017 1:43 pm    Post subject: Reply with quote

Thank you. What a nuisance though!

Maybe the answer would be just to sell the smaller property, buy the big property, then buy another smaller property again as the stamp would be less. The whole thing is a pain Mad
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Nemo



Joined: 14 Aug 2008
Posts: 7061
Location: Norfolk

PostPosted: Sun Mar 05, 2017 4:38 pm    Post subject: Reply with quote

This is a helpful article and calculator I've found. http://www.knightfrank.co.uk/buy-to-let-stamp-duty-calculator
Quote:
Who pays the higher SDLT?
Under the new proposals, all property owners purchasing an additional property to their main residence in England, Wales and Northern Ireland will be affected by the rise in SDLT. If you already own properties but plan to buy a permanent home to replace another, you are exempt from the paying the higher rate.

If you own two properties on the day of completion of the purchase of your second property but still legally own your first property and plan to sell, you are still obliged to pay the higher rate of SDLT. A refund is available if you sell your former residence property within 36 months.
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Essar



Joined: 12 Jun 2011
Posts: 3244
Location: Bournemouth

PostPosted: Tue Mar 07, 2017 3:14 pm    Post subject: Reply with quote

This article is this months "House" magazine; although, by a holiday letting agent, they do outline the main advanatages and disadvantages of buying a holiday let.

Here.
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