UK Landlord Forum / Life

Hello,
I am in the process of selling my main residence, and buying a BTL property and a new main residence simultaneously. However, my main residence purchase is probably going to fall through, so I'm faced with the prospect of either very quickly finding something else to buy as my main residence, or moving into rented accommodation. However, if I sell my main residence and buy a BTL property on the same day, according to my solicitor, I WON'T pay the 3% stamp duty surcharge on that, but WILL then have to pay the 3% surcharge when I eventually buy a main residence.

This seems nuts, because the BTL property is not my main residence and I never plan to live in it. I'd much prefer to pay the 3% stamp duty surcharge on the BTL property because that property purchase will be significantly cheaper (probably) than my main residence purchase. I already own other rental properties.

So, can anyone confirm whether or not this is the case?

Thanks in advance for any help! (I've searched this forum but can't find any recent articles that seem relevant).

I didn't think it mattered if it's considered your main residence. It matters if you own >1 property, which you've said you do. So all new purchases will be liable for the 3% kicker, won't they?

Everyone could do what MPs were doing a few years ago - was it called "flipping"? Where they'd avoid tax (CGT, I think) by temporarily calling a property their main residence or summat just before they sold it, usually for large capital appreciation?

If you have 0 properties and buy 1 then you pay the normal rate of SDLT.
If you have 1 or more properties and buy 1 more, or many more, then you'll pay the kicker rate of SDLT, on them all.

Your Solicitor could at least do with a check for your own sanity... as that's my understanding.

Thanks for your reply, Hippogriff.

Quote from: Hippogriff on July 12, 2017, 04:52:06 PM
I didn't think it mattered if it's considered your main residence. It matters if you own >1 property, which you've said you do. So all new purchases will be liable for the 3% kicker, won't they?

If you have 0 properties and buy 1 then you pay the normal rate of SDLT.
If you have 1 or more properties and buy 1 more, or many more, then you'll pay the kicker rate of SDLT, on them all.

I'm sure (from my own research and from my solicitor's information) that, regardless of how many properties you own, you can sell/buy your main residence without paying the extra 3%  SDLT. But my solicitor is saying that the number of properties you own at the end of the day of completion is the only thing that HMRC looks at.

This is from https://www.primelocation.com/discover/buying/guide-to-the-3-stamp-duty-surcharge/#iUgBFXLHmXxcr9RK.97

If the home you are buying directly replaces your main residence, you will not have to pay the 3% surcharge, even if you own an additional home/s at the same time. This example is straight from the Government's consultation document:

"A owns both a main residence and a second home. She sells her main residence and purchases a new one. Although she has two properties at the end of the day of the transaction, she has replaced her main residence so the higher rates will not apply."

Rented accommodation however, does NOT constitute a main residence as your previous main residence will need to be disposed of (ie, sold) to escape the surcharge. Gifting a property DOES constitute disposing of your main residence, according to the Treasury.

Not sure what that last bit about rented accommodation means. I think some more research is in order!