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SamUK

09 May 2016 02:40 PM

Stamp Duty - Confision

Can someone please explain to me..

I own a home at the moment, and i will be converting this to let to buy, and purchase another house costing £400k - and move into this.

Will i still need to pay the stamp duty? is this 3% or 8%

Found this - but i am little confused still..

http://hoa.org.uk/2016/03/stamp-duty...ions-answered/

markjmd

09 May 2016 04:16 PM

Looks like your situation is covered by this example:

Quote:

What if the home I’m buying is my main residence or I don’t sell my previous home straight away?

If the home you are buying is replacing your main residence, then the additional 3% stamp duty will not apply.
However, if you move out of your main residence but keep it and buy another main residence, you will have to pay the 3% stamp duty surcharge initially.
If you sell the first home within 3 years of completing on the purchase of the new home, HMRC will make a full refund. But you need to pay the 3% surcharge upfront and on completion.

The stamp duty rate on your new 400K pad will be 8% to start with, but you can claim back 3% if you sell up the old place within 3 years.

SamUK

09 May 2016 05:21 PM

But it says you will need to pay 3% initially..

8% is one buy to let's or second homes..

8% is allot on a 400k house..

markjmd

09 May 2016 06:09 PM

Quote:

Originally Posted by SamUK (Post 11830949)

But it says you will need to pay 3% initially..

It's talking about the new 3% buy-to-let/second-home surcharge, not the total amount of stamp duty you'll have to pay:
"you will have to pay the 3% stamp duty surcharge initially"

Quote:

Originally Posted by SamUK (Post 11830949)

8% is one buy to let's or second homes..
8% is allot on a 400k house..

Yep, it is, and the fact it's effectively a form a double taxation makes it all the more scandalous. I suppose we have to count ourselves lucky it's not charged at the same rate as VAT, although it's certainly heading that way.

SamUK

10 May 2016 02:08 PM

Found this..

https://www.tax.service.gov.uk/calcu...nd-tax/#/intro

Have to pay £22,000 on a £400,000 house.

If i sell the old house within 3 years i can claim £12,000 back.

Current House, if i let it out...

The rental income after 3 years is near £30k after paying the mortgage if i let it out (maybe little more) as its in London.

So makes sense to hold on to it for investment purposes..

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