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Thomas
Thomas, Solicitor
Category: Property Law
Satisfied Customers: 7626
Experience:  UK solicitor holding an England and Wales practising Certificate.
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I live in a small property (one) with an interest only

Resolved Question:

I live in a small property (one) with an interest only mortgage, I have been looking to move for a while. Recently I came into some money, so to avoid the stress and unpredictable nature of a change I am purchasing a slightly bigger property (two) as a cash buyer and intending to sell property one as soon as I have moved in. I have now learnt about the higher stamp duty, Does this higher rate apply, bearing in mind I have no intention of renting either properties?
Submitted: 1 year ago.
Category: Property Law
Expert:  Thomas replied 1 year ago.

Hi,

Thanks for your question.

If you will not sell your current property immediately upon completion of the purchase of the new property, then you will have to pay the higher rate stamp duty on the purchase because you would not be regarded as replacing your main residence at the time of completion because although you may live in it immediately you will still own your current property.

However, once you have sold your current property after you have purchased the new property you will be eligible to apply for a refund between the lower rate stamp duty you would normally pay and the higher rate that you will have to pay upon completion of the purchase. You can apply for the refund provided that you sell your current property within 3 years of the date that you complete your purchase of the new property.

If you do not sell your current property within 3 years of the purchase then you will not be able to claim a refund.

My goal is to provide you with a good service. If you feel you have received anything less, please reply back. Please remember to leave positive feedback using the stars at the top of the page.

Kind regards,

Tom

Customer: replied 1 year ago.
Thanks Thomas,
You say " If I do not sell my current property immediately" I will be liable for higher SD, can you clarify Immediately please.
ThanksCheryl..
Expert:  Thomas replied 1 year ago.

Hi,

You will pay higher rate SD when you complete your purchase because you are not yet selling your current property.

If you then subsequently sell your current property within 3 years of the date of your new purchase then you can claim back the excess stamp duty that you pay upon completion.

Tom

Customer: replied 1 year ago.
I have not yet allocated a solicitor, Will they automatically ask me if this is my second property?
Customer: replied 1 year ago.
Do I declare this with my solicitor? or address the tax implications later?
Expert:  Thomas replied 1 year ago.

Hi,

Yes, you need to tell your solicitor about your other property, they will need to know as they will submit your HMRC sd return on your behalf.

If you live in the new property then there will not be any CGT implications on provided you sell your current property reasonably soon after completing your new property but beyond that you would have to seek the advice of an accountant.

PLease leave feedback using the stars at the top of the page.

Tom

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