House Buying & Renting

Tysonator · 30 Jan 2021 at 21:43

Hello members,

An unusual question,
before I advise a family member to buy a property I though I might ask the OC forum collective.

If a family member were to buy a residential property with the intention of letting out say 3-6 months after purchase what impact / liability would there be for Stamp duty ! ?

So if the property is purchased as residential and the normal stamp duty was paid what is the acceptable / normal time table before the property can be let out ! ?

The purchase will be non mortgaged

lee32uk · 30 Jan 2021 at 22:32

Hi

You might be better asking in the 'Home and Garden' section. Not sure you will get much help in PC General Hardware, unless they want a PC as well

If you click on Report post you can ask a Mod to move the thread, or I can ask in the Mod lounge section.

pp111 · 31 Jan 2021 at 13:13

With the HMRC I find it is largely how good your accountant is. You generally have to have a convincing story with them, like how many properties has the buyer got, do they rent any properties, is the new property being lived in by the buyer, and things like that. Depending on the answer will dictate whether the HMRC believes you. But be warned, even making inquiries that are deemed to be aimed at avoidance of payment of Stamp Duty may result in you being instantly slapped in court and fined heavily. Conveyancers are legally bound to report you if you even suggest you are trying to fiddle the system. Stamp Duty is trivial. Pay it.

DaveCator · 31 Jan 2021 at 15:19

Don't try to play the system against HMRC even if you think its a "grey" area where you might be ok. There is no right of appeal against any decision they take and so if they decide you are in the wrong you are stuffed.

I had a stamp duty disagreement with them in the past when I tried to reclaim stamp duty that I had paid on a propety prior to selling my old property. They changed the wording on when you are able to reclaim the duty between me selling the property and submitting the paperwork to reclaim the stamp duty I had paid. They dismissed my claim even though I could prove that at the time of selling the propery I was elligible for a refund. I attempted to appeal the decision but there is no right to appeal so it was dismissed.

pc-guy · 1 Feb 2021 at 21:16

Stamp duty has nothing to do with if the property is buy to let or residential.

If any one of the purchasers (assuming it is a joint purchase) already has a property under his/her name then the new purchase will be liable for a flat rate 3% stamp duty on top of the usual stamp duty for first time buyers.

If they buy the property with residential mortgage and with the intent to live for 6 month then rent out, they will need to find a bank that consents to letting. It is called consent to let. This is the proper way to do it as otherwise if the lender find out about letting without consent then they can break off the lending demand payment in full which means the property will need to be put on market etc. But in reality no lender checks.

in terms of tax on rental income, it is far more complex. They need to do their research.

RallyMotor · 3 Feb 2021 at 13:58

Hi there, need some help if I can. I am going to sell the house in Brighton and I heard about government tax waver effective till March 2021. Do you know where I can check what conditions are applicable?

Skillmister · 3 Feb 2021 at 14:00

RallyMotor said:
Hi there, need some help if I can. I am going to sell the house in Brighton and I heard about government tax waver effective till March 2021. Do you know where I can check what conditions are applicable?

You could try the Gov.uk stamp duty main page..

RallyMotor · 3 Feb 2021 at 14:03

Skillmister said:
You could try the Gov.uk stamp duty main page..

Aww thanks, I guess I have to

Although I might keep wondering how much time they will take off my life

Tony Edwards · 3 Feb 2021 at 21:42

lee32uk said:
Hi

I just have to say Lee32uk you have the best avatar. Who do I have to kill to get that?

Tysonator · 4 Feb 2021 at 22:23

The house purchase will be cash, so no mortgage and at the moment if family member rents the property it will be liable for 3% stamp duty on the purchase value.
They are looking at a potential bill for apx 9k !
Plus paying income Tax on letting income and when they sell capital gains tax of 18% on the any profit element ( after personal allowance ).
Might as well just hand over all you cash to the government ! !
They are too young to claim pension and are looking to build a cash base for retirement as bank a/c interest rates are so poor at the moment.