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Question

Tax (England)

The new Stamp Duty rates

27 Apr 2016 | 1 comment

Hi,
I rented out my only house when I moved in with my partner 7 years ago.
We are unmarried and my partner owns the house we live in.

I’m intending to buy a house for me, my partner and the two children (one of which is my son).

Up until the change in Stamp Duty this month, I was intending to continue renting out my property and my partner was going to rent out her property (the house we currently live in).

I have a few questions:
Firstly, assuming I have not sold my rental property when I buy my new house, will the new property be classed as a second home and be liable to the higher stamp rate?

Secondly, I’ve heard that if I sell my rental property within 3 years of purchasing the new property I’ll get a rebate. Is this true?

Finally, does any of this have any bearing on my partner renting our her house when she moves in to a new house bought by me? If she is not the owner will it/will it not b considered as her second home.

Hope you can help.

Answer

1 Comment

  1. guildy

    If you haven’t sold your house by the time of the new purchase, you will have to pay the higher stamp duty because you will own two homes.

    You are correct that if it’s sold within 3 years you ‘may’ get a refund. Presumably you must prove that the previous house was your principal home and so is your new house. This will be to avoid property developers moving into property then selling them on for a profit and trying to avoid the higher tax. The request must be made within 3 months of the sale of your previous main residence or within 12 months of the filing date of the return, whichever’s later.

    I’m afraid I’m unsure about your partner. I can’t see any reason why your partner should be affected but tax isn’t really my area of expertise.

    See here for details about residential property rates.

    See here for details about applying for a rebate

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