What is the effect of retaining an only or main residence on the 3% surcharge
“Client owns a property (that he instructs was his main residence) but which he re-mortgaged last month on a BTL basis. It is now a BTL property.
He is now completing on the purchase of a new property which will become his main residence.
So, at the end of the day on completion he will own two residential properties, one BTL and one as his main.
I am of the view that:
1. As he owns two residential properties, one main and one BTL and
2. He is not replacing the former main (now a BTL) for a new main that he is liable for the additional SDLT levy.
Am I correct?”
Source: BLG Member
You are correct. As, at the end of the day of completion, the client will own two dwellings he will be liable to pay the 3% additional SDLT surcharge on the purchase of the second unless he is replacing his only or main residence. As he is not disposing of his previous home this is not the case and the additional 3% will be due.
At the time of publication this response was correct however as tax legislation and practice change from time-to-time you should take specific advice before taking any action.
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