MegaSack DRAW - This year's winner is user - rgwb
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I tried Google but I cannot seem to get straight answer on this. I cannot be the only one to have been in this situations, so thought I would ask on here!
Back in 2016 we moved from House A which we owned into a series of rental house until May 2020 when we brought House B and paid the additional stamp duty. During this time we rented out House A
We were initially intentional landlords while we decided if we liked the new town but have been trying to sell house A since 2018. This has not made easy due to various reasons so we decided to buy a new places as we could not keep moving every year (had a series of landlords ending tenancies due to moving back in, selling etc) and wanted our daughter to have a bit of stability. So took a big mortgage for House B and just managed it until we could sell House A. It now looks like House A is now being sold, at last!
So we were out of House A for almost 5 years before it was sold but it was sold only a year after we brought House B. If we had lived in House A the whole time and had never rented it out it is very clear that we could claim the additional stamp duty backs as it was in the three year window. However since we were out of House A for longer than three years have we lost the right for it to be our Main Residence for Stamp Duty reclaim? That would be a pain! Anyone able to help?
I think you are out of luck
https://www.gov.uk/government/publications/stamp-duty-land-tax-apply-for-a-repayment-of-the-higher-rates-for-additional-properties
You can apply for a repayment of the higher rates of SDLT for additional properties if you’ve sold what was previously your main home if you’re either the:
main buyer of the property which was charged at the higher SDLT rate
agent acting for them
You must have sold your previous main residence within 3 years of buying the new property to qualify for a refund unless exceptional circumstances apply.
Exceptional circumstances
Exceptional circumstances
You may still be able to apply for a refund, if you purchased your new home on or after 1 January 2017 and were unable to sell your previous home within 3 years. To be able to get the refund, the delay in selling must be because of reasons outside of your control. These may be, but are not limited to:
the impact of coronavirus (COVID-19) preventing the sale
an action taken by a public authority preventing the sale
Once the reason has ended, you must sell the previous home to be able to apply for the refund. You can then write to HMRC and include:
an explanation on why you were unable to sell your previous main home within 3 years
the other required information
You should send the information to:
BT Stamp Duty Land Tax
HM Revenue and Customs
BX9 1HD
You can find more information in our SDLT manual.
Were the reasons outside your control?
If you only bought House B in May 2020 then you can claim it back, the fact that you had to pay the 2nd home rate meant that at that time House A was still classed as your main home, and you paid the 2nd home rate, you have three years from the date you bought your second home.
You will need to be wary though as if you moved out of House A, you may be liable for some Capital Gains Tax for the time you didn't live there.
The solicitor who helped you buy House B should be able to submit the reclaim form on your behalf now you have sold House A (and if you used the same solicitor for both, that would be even easier)
There are two three year tests you need to meet. First, you need to sell the old home within three years of purchasing the new home. You pass this test. Second, you need to have lived in the old home as a main residence within the three years prior to the purchase of the new home, you appear to fail this test so no repayment is due.
Mefty, Thats was one of my readings of it but I was very unclear. If we were to buy a rental investment property (House C!) would we incur additional stamp duty again? In that scenario which is our Main residence if both properties had additional stamp duty paid.
Does sales falling though to Brexit job losses count as exceptional? Had two of those. Could be coved under ' an action taken by a public authority preventing the sale'? Only joking.
If we were to buy a rental investment property (House C!) would we incur additional stamp duty again?
I think rather unfairly you would and your main residence would be the one you live in.
You have met the seliing test so any delays in selling don't matter as you don't need the "exceptional circumstances" extension to pass it. The test you failed doesn't have an exceptional circumstances test. Sadly you needed to buy your current home in the previous year then you would have passed both tests.
if you have kicked the tenants out already, is there anything to stop you moving back in to it as your main residence for a month or so (even if just on paper) to make sure that you tick all the boxes if they follow up?
I understood that to reclaim the additional stamp duty, the property sold would have had to be your primary residence during the 3 year period.
I ended up paying the extra 3% when I bought as at the time I was part owner of my late parents home. I queried with the solicitors dealing with the purchase whether it might be possible to reclaim the 3% if my parents' place sold in time, but was told that as I hadn't lived there for 20 years, it couldn't be justified as a sale of a primary residence, so HMRC would be keeping hold of the cash.
If we were to buy a rental investment property (House C!) would we incur additional stamp duty again?
I should hope so. One of the reasons for the extra charge is to stop wannabe landlords chewing up all the affordable housing stock.
Thanks all. Feeling a bit done over as I only want one house and have to pay the secondary stamp duty as we could not sell for reasons out of our control (although I am sure we could have sold at a loss of we wanted to). Anyway that's life.
Flaperon, happy to pay additional stamp duty on a second house, but don't see it as that unreasonable not to want to pay on both houses.