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SDLT and low value properties

SDLT and low value properties

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We have a client who owns a buy to let worth £35k (yes they do exist in parts of the UK), this is the only property that they have ever owned, now they wish to buy a home of their own, it is my understatnding that as the current property they own is less £40k than the additional 3% charge wont apply to the purchase of their (new) own home (costing £190k). Am I right in this thinking.

 

 

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13th Feb 2019 11:06

Worth checking the HMRC Stamp Duty Land Tax Manual to ensure that your thinking is correct.

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13th Feb 2019 11:06

Duplicate

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13th Feb 2019 11:14

You are correct - it is condition C in paragraph 3 of Schedule 4ZA to Finance Act 2003.

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to Wilson Philips
13th Feb 2019 11:33

Sorry Wilson...my post took a while to load so crossed with yours!

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By CW2012
13th Feb 2019 11:23

Thanks for the replies, not seen this one before but how many people own a first property worth less than £40k and then buy another.

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to CW2012
13th Feb 2019 11:27

I think a more straightforward question would be - "How many people own a buy-to-let property that is currently valued at only £35k?". As you say, there may be some around, but they must be extremely rare.

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13th Feb 2019 11:31

That would be my view too....FA 2016 Schedule 4ZA Part 2 Section 3....it appears that condition C (needed for the higher rates to apply) is not met here.

The gov.uk website also says:

"You must pay the higher SDLT rates when you buy a residential property (or a part of one) for £40,000 or more, if all the following apply:

-it will not be the only residential property worth £40,000 or more that you own (or part own) anywhere in the world
-you have not sold or given away your previous main home
-no one else has a lease on it which has more than 21 years left to run"

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By CW2012
13th Feb 2019 11:52

Thanks, it looks like our client satisfies all the conditions to disapply the SDLT surcharge. I'd like to think that this was out of a planned purchase but the word fluke comes to mind.

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