UK Stamp Duty 2nd home tax?

[dixonrichard]

Hi Just in process of buying in Paphos (not yet completed). However I have my family and only home in the Uk. We are maybe planning to move house in the UK next year, but I heard about the 2nd home tax. Does buying a holiday home impact any future moves for main residence in the UK? and if we move will this trigger the additional tax? seems unfair for main family home.

Any view kindly appreciated.

[Nigel Howarth]

Hi dixonrichard

I'm not an expert on UK property laws, but it appears you will not be liable for increased Stamp Duty on the purchase of your family home:

If the home you are buying directly replaces your main residence, you will not have to pay the 3% surcharge, even if you own an additional home/s at the same time. This example is straight from the Government's consultation document:

"A owns both a main residence and a second home. She sells her main residence and purchases a new one. Although she has two properties at the end of the day of the transaction, she has replaced her main residence so the higher rates will not apply."

Rented accommodation however, does NOT constitute a main residence as your previous main residence will need to be disposed of (ie, sold) to escape the surcharge. Gifting a property DOES constitute disposing of your main residence, according to the Treasury.

But you will need to check with your UK solicitor.

Regards,

[Pantheman]

Hi Just in process of buying in Paphos (not yet completed). However I have my family and only home in the Uk. We are maybe planning to move house in the UK next year, but I heard about the 2nd home tax. Does buying a holiday home impact any future moves for main residence in the UK? and if we move will this trigger the additional tax? seems unfair for main family home.

Any view kindly appreciated.

I had read that when they were considering the law regarding this extra thieving tax, that if you owned a holiday home, it was also considered as a second home so you would have to pay. It is possible that they part was never ratified, just ring the tax office and ask.

[dixonrichard]

Yes thank you Nigel, have deduced that I should be ok too. Thought process was that I did not inadvertently want to create a 3-5% surcharge on main residence move next year. In my opinion this tax appears very regressive !