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Will a client be liable for additional 3% SDLT when buying a new home, but retaining the old property for a limited period?

Q: My client is about to relocate for employment reasons and wants to buy a residential property in her new location. Her adult son is remaining in the current residence as he attends college near there. Will my client be liable to the additional 3% SDLT on the purchase of the new property? The son will be moving out in the next couple of years then the old property will be sold.

A: The additional 3% charge is to be brought in with Finance Act 2016. This is currently in Bill form but if it goes ahead as now stated then, in the first instance, your client will be liable to pay the additional SDLT on the purchase of her new residence. The government originally proposed that, where the old residence was sold within 18 months of the new purchase the additional 3% could be claimed back. This period has now been extended to 3 years. So, if the client sells the old residence within 3 years she will be able to claim back the additional 3%.