Selling A Second Property In The UK
Selling Your Second Home
Normally when moving home you must sell the one you’re currently living in to finance the purchase. There are some instances, however, where it may have made economic sense to keep hold of the property and utilise it as a second income rather than sell it. Although, due to a couple of proposed changes due to take effect in 2015, it may be time to revise that decision and cash out on a second property.
Changes In The Law For Second Homes in the UK
The first is owed to new powers being given to the tax office on deciding which of the properties is the main residence.
Previously, homeowners were free to elect which property it was, but these new rules would mean that it would be based loosely on where the homeowner spends most of their time; factoring in things such as where their children go to school, where they are registered to vote, where their registered doctor is and where their correspondence with banks, for example, are addressed. The intention is to stop homeowners nominating properties as their primary residence simply because it is cheaper.
This impacts which of the properties would get Private Residence Relief tax exemption and which would be liable to pay Capital Gains Tax (CGT). CGT is a tax on the profits from the sale of assets, which would be levied on the sale of a second property at either 18pc or 28pc depending on the rate of tax an individual currently pays. In short, if you are a standard-rate taxpayer, it will be up to the tax office to determine which of your properties is exempt from CGT and by extension, which are subject to an 18pc CGT.
Capital Gains Tax Exemptions Cut
Currently, the last 36 months of a homeowner’s tenancy in their former home are exempt from CGT but this has been revised to the last 18 months. For example, an individual who bought a house for £250,000 ten years ago moved out 12 months ago and sold it for £300,000 would not have to pay CGT. If however, they moved out more than 18 months ago, they would be required to pay some CGT on £39,100 of the profit they made on the sale of the property – this figure accounts for the threshold on profits that must be met before the tax is applied which was £10,900 for 2014-15.
So, any delay in selling an old property of over 18 months would, therefore, incur a Capital Gains charge when it is eventually sold.
Other Reasons for Selling a Second Property
Maybe the market is at its peak or they are at a point in their lives where they want to release the equity they have in their second home for other things. The rising cost of living is a factor but often our customers want the money so they can continue to meet their children’s seemingly never-ending financial demands as they head off for university, for instance. Sometimes they have even got through that period and want to take a well-deserved luxury holiday in the Caribbean to celebrate.
We Will Buy Your Second Home
Whatever your reasons for selling, here at National Homebuyers, Britain’s leading house buying company, we buy any house in the UK directly and privately, with no third party involvement. We offer an individual, no obligation valuation for your home and guarantee that a fast cash offer will be made, allowing you to sell your house quickly. So, if you want to sell your house fast and stress-free, without the hassle of dealing with estate agents, contact us now using the form to the right or the telephone number at the top of the page. Alternatively, you can request a call back using the link that is also found at the top of the page.