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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3609
Experience:  Solicitors 2 years plus PQE
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I am buying a house and would like to sell it asap.

Resolved Question:

I am buying a house for cash and would like to sell it asap. I have however been told that with recent legislation, it would be nearly impossible to sell in the first 6 months after purchase.
I am told that potential buyers would have considerable difficulty in getting a mortgage within the first 6 months and if they got one it would relate to my purchase price rather than my selling price and its to do with money laundering??
what are the facts for me as an individual and would it be different for me as a ltd company ?
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Are you in the business of buying and selling property?
Kind regards
AJ
Customer: replied 1 year ago.
Not in any professional capacity just a one off but who knows in the longer term
Customer: replied 1 year ago.
why does it change your perspective???
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
I would understand that a bank may refuse the mortgage where the seller is selling their personal home within 6 months for no apparent reason and at a higher price.
However if it is an arms length transaction and it is being done for a commercial purpose, i.e the fledgling stage of a property business, then this should not at all be a bar to some one obtaining a mortgage.
Professional developers flip property all the time, and a professional mortgage lender will be aware of this. The concern may be if, for example one of the state owned banks, were seen lending on a sale and purchaser of property where it was being cynically done to avoid paying capital gains tax due to the seller taking advantage of the primary residence rule.
Will you declare this as your primary residence?
Kind regards
AJ
Customer: replied 1 year ago.
No its not my primary residence but neither is it a sale by a limited company..
So, let me understand this, provided its not my primary residence I should have no problem.
However were I to buy it for £250,000 and then sell it again for say £280,000 then would a buyer with a 90% mortgage get 90% of my purchase price £250k or the selling price £280k within the 1st 6 months, given a new survey report said £280k
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
You need to demonstrate that there is a commercial purpose for the transaction. Your purpose is you are trying to sell the property at arms length (meaning to an unconnected third party) for the purpose of making a profit. You are not flipping it as a mechanism of using your personal residence capital gains tax relief to avoid tax of on your profits.
Will the property be advertised of do you have a buyer lined up?
Kind regards
AJ
Customer: replied 1 year ago.
it will be advertised to all and sundry.....
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
This can all be used as evidence that this in fact an arms length transaction, to an unconnected third party.
I would bare in mind that different banks have different lender criteria, that are not necessarily dictated by law. It will be up to your purchaser to ensure that have lender whose criteria they can meet.
Do you need a mortgage to buy the property?
Kind regards
AJ
Customer: replied 1 year ago.
no I'm fine thanks AJ
It seems as though as I should go ahead and then sell (flip) it as soon as possible.please confirmand If that's the case, then thank you for your extremely helpful advice. It has been key to my decision..Best wishesPeter
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
My apologies - I was not offering a mortgage :) - I was asking because if you have a mortgage, your lender will probably not let you sell within 6 months.
I cannot guarantee what the lending requirement is for every mortgage company, but I can tell you that there is no law prohibiting what you are doing. In relation to money laundering there will always be a requirement of professional organisations to take care and do due diligence - but if you have a reasonable explanation for doing something then the anti money laundering laws should not prohibit you. To satisfy a buyers lending requirements, evidence of transparency will help for example advertising it on the open market. Also if you have a good relationship with your solicitor, you can get them to confirm that you doing this in order to make a profit and in the pursuit of a business, this can be used as a commercial justification.
Kind regards
AJ
Alex J., Solicitor
Category: Law
Satisfied Customers: 3609
Experience: Solicitors 2 years plus PQE
Alex J. and other Law Specialists are ready to help you
Customer: replied 1 year ago.
Many thanks Alex
Very helpful indeed..................
best
Peter

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