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Hello!
 
I'm wondering if anyone can help regarding a stamp duty question?
 
If i were to buy a property as residential for cash and then remortgage under a FHL (Investment property), would i then be able to buy a new residential property without having to pay the higher rate of stamp duty?
 
In short, is the above a way of acquiring two properties without paying the higher rate of stamp duty?
 
Thanks!
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I don't think so - I don't believe there is anyway around this one. 

If you buy a second property and then subsequently sell the first within quite a tight time frame you can, I believe, claim back the Stamp Duty but the bottom line is if you already own one property then you need to pay the additional 3% on the next one.

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Hi all

No is the answer.

https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-on-purchases-of-additional-residential-properties/stamp-duty-land-tax-higher-rates-on-purchases-of-additional-residential-properties

This explains it. No guessing.

You have to buy one and sell the other in the same day, that is the tight timeframe Julia refers to.

Hope this helps

Conrad

Conrad Paton

+44 7957 959851

conradpaton@yahoo.co.uk

https://www.linkedin.com/in/conrad-paton-424446110

 

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If you buy the first property in a company and the resi in your personal name, you will avoid the 3% SDLT premium on the resi property but you will still pay the 3% SDLT on the FHL.

If you do it the way you describe, then you will pay the 3% SDLT premium on the resi property (unless you sell the first one first or if it was your home).

So...pick which one you want to pay the extra 3% on ;)

Best

Richard

Richard W J Brown a.k.a. The Property Voice

Property Investment Strategist

10%+ ROI property deals every week: check out PROPERTY DEAL TIPS
Amazon best-selling author Property Investor Toolkit & #PropTech, YPN Magazine columnist & PODCAST host

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Richard,

Are you sure that a company can gain a mortgage for FHL's? If so can you share the lending product.

Plus, even if this is possible, can you please explain to the OP the additional accountancy  costs of continuing this stragergy with a limited company.

It's nice to have all the facts so a informed decision can be made.

Conrad

 

Conrad Paton

+44 7957 959851

conradpaton@yahoo.co.uk

https://www.linkedin.com/in/conrad-paton-424446110

 

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conrad, a fast google... source hoa.org.uk

Where can I get a holiday let mortgage?

Most of the big lenders don’t offer holiday let mortgages.

Leeds Building Society and Principality Building Society both offer them. After them it tends to be smaller building societies such as The Cumberland, Furness Building Society and Bath Building Society all lending on holiday lets.

The best way to make sure you find the right mortgage for your holiday let, and ensure your chances of a successful application, is to use a mortgage broker. They know the market and may be able to access specialist mortgages that you can’t find on the open market."

 

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Foundation Home Loans (also FHL lol) are quite competitive at the moment..I know they do holiday let / serviced accommodation mortgages and also lend to limited companies. There are others, but it's best to check with a decent broker more familiar with the subject for the best current products, as I am not a mortgage broker myself ;)

To be fair, FHLs are actually a good foil to a BTL when buying in an individual name due to the ability to offset mortgage interest and certain tax breaks. Buying an FHL in a company is no different from buying individually from an interest relief point of view and you could get some additional tax breaks as well, such as capital allowances on certain expenditure, for example.

Costs of operating a rental property through a company mean accounting charges (c£1k or so pa) and typically higher lending rates (typically 0.25% to 0.75% higher rate). But it's not as simple as that, especially if you plan to scale your property business above say 4 or more properties, are a higher-rate tax-payer and don't need to draw the income for a long-time as well. In these cases, it could well be better to set up a property investment company. Attached is an article that I wrote a couple of years ago and so things have moved on again since then but it illustrates that it's not a 'one-size-fits-all' approach.

Hope that helps the OP...

Best

Richard

Property Investing - Is It Still Worth It.pdf

Richard W J Brown a.k.a. The Property Voice

Property Investment Strategist

10%+ ROI property deals every week: check out PROPERTY DEAL TIPS
Amazon best-selling author Property Investor Toolkit & #PropTech, YPN Magazine columnist & PODCAST host

Web & Blog: The Property Voice | Curated property news & insights feed

Facebook Page | TwitterLinked In

Let's connect...mention The Property Hub :)

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