Can anyone help - question re: stamp on second homes

If you're buying or selling, tell others about it here. Or ask other owners for advice.
Tommytink
Posts: 11
Joined: Wed Feb 15, 2017 3:41 pm

Can anyone help - question re: stamp on second homes

Post by Tommytink »

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...
ianh100
Posts: 598
Joined: Thu Jan 10, 2013 4:37 pm
Location: Sherborne Dorset

Post by ianh100 »

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
Tommytink
Posts: 11
Joined: Wed Feb 15, 2017 3:41 pm

Post by Tommytink »

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 :x
User avatar
Nemo
Posts: 7062
Joined: Thu Aug 14, 2008 10:15 am
Location: Norfolk

Post by Nemo »

This is a helpful article and calculator I've found. http://www.knightfrank.co.uk/buy-to-let ... calculator
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.
Essar
Posts: 3243
Joined: Sun Jun 12, 2011 5:24 pm
Location: Bournemouth
Contact:

Post by Essar »

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.
"Write something, even if it's just a suicide note"
"There is no human problem which could not be solved if people would simply do as I advise"
"As for my amnesia, I've had it as long as I can remember"
Real name: Steve
Gender: Male
Post Reply