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Sam
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Category: Tax
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I am selling my second home 550K and buying same day another

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hello, I am selling my second home 550K and buying same day another second home 550K. the new property has a sitting tenant under an AST for another 3 months. when his lease terminates it will be available for my occupation. Can I elect for the new property to be my main residence from the date of purchase. and what will be the stamp duty for this case?
Customer: replied 11 days ago.
correction: I am selling my second home 550K and buying same day another home 550K.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Hi

No it cant be your main residence from the date of purchase as you have a sitting tenant in it so only from the date of occupation I am afraid, the stamp duty will be over the £500,000 threshold together with the additional 3% as you are not disposing of a main residence (be in though this new purchase you plan to be your main residence) and it would appear you plan to keep your main residence and still own two properties at the end of this purchase transaction (as you state you are about to sell your second home suggesting you already have one)

let me know if this is, of course not the case

Thanks

Sam

Customer: replied 11 days ago.
Thank you Sam, so the problem is, that the tenant is in I understand. If the property is empty on day of completion, what would be the stamp duty then? Would make sense to pay some money to the tenant to leave earlier.
Customer: replied 11 days ago.
if it would be my main residence that is switched to another main residence that is vacant on day of completion there would be no stamp duty, correct?

Hi

The same - as you are not selling your main residence in that instance just buying a new residence (you have to be selling the main residence as well as buying a new one to avoid the 3% higher charge )

Thanks

Sam

Customer: replied 10 days ago.
is there not any other way to save stamp duty?
Customer: replied 10 days ago.
much money just for moving
Customer: replied 10 days ago.
feels very unfair because the existing tenant is only there for 4 more months, and the seller needs to sell NOW, isn't that a special circumstance that can be considered to allow lower stamp duty?

Hi

Its because you aren't selling a main residence and I am afraid I dont make the rules its to help genuine home buyers but it does sadly penalise those trying to invest for the future

Thanks

Sam

Customer: replied 10 days ago.
if I would sell my main residence, and buy a new main residence same day it would be free of stamp duty, even if there would be a sitting tenant for a few months? Did I understand this correct?

Hi

No

Its not a new residence as you have a sitting tenant so even if you were selling your main residence you would still be charged 3% surcharge on stamp duty Im afraid

Thanks

Sam

Customer: replied 10 days ago.
ok, I will try to ask the tenant to leave earlier before completion to benefit from the lower stamp duty. thank you very much for your help!

If the tenant leaves before exchange and you sell the main residence (as you then are also selling a main residence and buying a replacement main residence) then this will be free from the excess stamp duty

thanks

Sam

Customer: replied 10 days ago.
just to confirm he must be gone before exchange or enough before completion?

Hi

Before exchange

So you are buying an empty house fir to take up as your new residence as that's when the stamp duty paperwork is completed

Thanks

Sam

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