We may soon be buying a house on the coast , 70 miles away.
We have 2 years left on our shop lease and the idea was that we would stay with family for 4 nights a week. However life on the coast is so tempting that they have moved down there.
We thought about staying in a premier inn but as the bills on our current house are £400 a month it makes sense to keep it as our “city pad”.
I know we can get the upper level of stamp duty back before 3 years are there any other taxes we need to know about once we sell the city house?
For council tax purposes could we own a house each to keep that bill down?
For council tax purposes could we own a house each to keep that bill down?
It depends on the numbers of adults living there and their occupation, rather than the numbers of owners.
Each council supposedly runs discounts to their own rules to make advice more difficult
There could be a potential CGT liability on any gain in value in the property that you aren't living in. However this may not actually turn into a tax bill depending on the details.
For council tax purposes could we own a house each to keep that bill down?
For council tax purposes you could get a discount for single person occupancy. You'd be lying of course, and something something fraud something, but the books would balance on paper and would be difficult to prove otherwise.
I think an unoccupied property is free for 12 months. But that would be easier to disprove if it's not actually empty.
A lot of this depends on which bit of coast and the council.
They all have different rules regarding second home ownerahip but generally I'd be looking at only having one name on the deeds of each house - but whether that's possible depends on the mortgage situation.
I totally get the council tax wouldn’t work.
The coast house will be 750 k and work house will be around 550k. We’ve lived in the work house for 20 years so I guess that might be considered our main residence.
Would that leave us open to CGT?
Is this the situation?:
You live in "the city" but you're buying a house somewhere else to move into full time in a couple of years when the shop lease ends. At which point you'll sell the city house.
If so I think:
You'll pay higher rate of stamp duty on the new house but you may get back the difference between the standard and higher rates if you move into the new house full time within 2 or 3 years.
If the new house is in an area where second homes attract a higher rate of council tax then you will have to pay this until you can prove to the council that it is your primary residence.
You should only be liable for CGT on the sale of the city house if it's no longer your primary residence (i. e. You've moved out, have told the new house council that that's your primary residence/are renting out the city house while living in the new house.)
Ithinkan unoccupied property is free for 12 months. But that would be easier to disprove if it's not actually empty.
Depends on the council..
West Sussex allow this. East sussex don't. In fact, in east sussex it's chaper for ONE person to cooupy a house, than NONE!
DrP
With regards CGT on the current house
Say you live in for 20 years (primary residence), then rent it out for 5 years. Or even leave it empty for 5 years and live elsewhere, just something which means it's not your primary residence.
Take the sale price, and deduct the purchase price (plus some allowances for upgrades, extensions etc) This is the gain. You then get an exemption for the period when it was your primary residence, so in this case only 5/25, or 1/5 of the gain is taxable. From that taxable gain deduct your CGT allowance (and your other half's if they also own the house) What's left is the amount you will pay tax on
