The Law Society has responded to the government’s consultation on the introduction of the 3% SDLT surcharge for purchases of additional properties after 1 April 2016, proposing a single test to resolve the ‘many complexities’ conveyancing solicitors will face around whether a property is a main r
The Law Society has responded to the government’s consultation on the introduction of the 3% SDLT surcharge for purchases of additional properties after 1 April 2016, proposing a single test to resolve the ‘many complexities’ conveyancing solicitors will face around whether a property is a main residence. These issues include:
· how to identify whether a purchaser has an existing interest in a property;
· what that interest comprises in circumstances where the purchaser is a member of a partnership, a co-owner, a trustee or beneficiary or owns property through an overseas ownership vehicle;
· whether a property being sold is a main residence, and whether it is sold within 18 months of the purchase of a new main residence (in which case the purchase of the new main residence is not caught);
· the impact of non-UK property ownership and the application of the main residence test;
· the amount of SDLT a conveyancer should have in their client account at the time of purchase, particularly when acting for a lender; and
· issues around buying property for children and elderly parents.
The Law Society’s proposed test would treat occupation of a main residence as a question of fact. ‘It would make no difference whether somebody has sold a pre-existing main residence and rolled over into a second main residence. It would simply be a question of looking at the use to which the second main residence is put by any one of the owners. And this is true even if that owner owns a less than 100% interest in the property.’ This would solve a series of issues, including joint ownership of existing properties, joint purchasers, potential chain breaking and difficulties of identifying the sale of previous main residences. The single test would also remove ‘the 18-month pre and post main residence disposals (and evidence therefore) from the equation’.
The Law Society has responded to the government’s consultation on the introduction of the 3% SDLT surcharge for purchases of additional properties after 1 April 2016, proposing a single test to resolve the ‘many complexities’ conveyancing solicitors will face around whether a property is a main r
The Law Society has responded to the government’s consultation on the introduction of the 3% SDLT surcharge for purchases of additional properties after 1 April 2016, proposing a single test to resolve the ‘many complexities’ conveyancing solicitors will face around whether a property is a main residence. These issues include:
· how to identify whether a purchaser has an existing interest in a property;
· what that interest comprises in circumstances where the purchaser is a member of a partnership, a co-owner, a trustee or beneficiary or owns property through an overseas ownership vehicle;
· whether a property being sold is a main residence, and whether it is sold within 18 months of the purchase of a new main residence (in which case the purchase of the new main residence is not caught);
· the impact of non-UK property ownership and the application of the main residence test;
· the amount of SDLT a conveyancer should have in their client account at the time of purchase, particularly when acting for a lender; and
· issues around buying property for children and elderly parents.
The Law Society’s proposed test would treat occupation of a main residence as a question of fact. ‘It would make no difference whether somebody has sold a pre-existing main residence and rolled over into a second main residence. It would simply be a question of looking at the use to which the second main residence is put by any one of the owners. And this is true even if that owner owns a less than 100% interest in the property.’ This would solve a series of issues, including joint ownership of existing properties, joint purchasers, potential chain breaking and difficulties of identifying the sale of previous main residences. The single test would also remove ‘the 18-month pre and post main residence disposals (and evidence therefore) from the equation’.
