Page 1 of Selling a 2nd home - How much tax will you get charged?

Title says it all really. Is there a way to pay less tax?

Any advice on the general subject would be appreciated.

"Life is like oral sex, one slip of the tongue and you`re in the 5hit" - Roy Chubby Brown

Subject to Capital Gains tax I believe. How you avoid it,, well, better let the lawyer types members answer that.

JohnF

GW6UFO is QRT at the moment

I believe (but I am no property lawyer!) that if you "sell" the house to someone you know and trust for a nominal fee (which you pay 40% tax on), they can sell it and give you the money in £30,000 deposits every 7 years without paying tax on it.

Of course, there is probably a much easier way!

A witty saying proves nothing. - Voltaire

This item was edited on Friday, 16th January 2004, 18:16

Well you have to plan this well in advance....one if you have a partner, then make one house in her name and the other in your name. Please bare in mind that for all intense and perposes you both exist as single ppl. Now you can sell one house and aslong as you buy another house (or put towards your other house) from the sale within 2 years there is no capital gains tax to pay. I was given this advise 5 years ago. CAB 8)

Its not what you know but who you know

You need to get professional advice on this..not just an answer in a forum....
There are many, many issues to consider. For example, it`s not as simple as selling it and paying CGT. It depends on whether you lived in it and how long ago. If you buy a house but don`t sell your other one, it`s hardly fair that if you do sell it after say, 3 months you pay CGT on it... there are other things to consider like tapered relief etc.....
Get advice..

Ste

Just pay the tax and get on with it. (rant warning) Some of us can`t afford 1 house let alone 2 because greedy people buy them and they have the cheek to force me to rent them back off them. I put an offfer in on a flat recently, and thought i would be in a strong position as a chain free first time buyer, but no. The vendor went with a guy who offered the same amount but had the `advantage` of already owning 8 flats in the town so they thought the deal would go through smoother with him. Great, so i have to waste money on rent each month while someone else has 9 flats. >:( >:( >:( I say people should pay 95% tax on selling a second house. You can only live in one at a time dammit. Soon there will be no 1st time buyers in the market and it will all crash, and i will pick up a bargin from some poor person that has gone bankrupt. But i won`t be crying. :D

This item was edited on Saturday, 17th January 2004, 01:02

Quote:
I say people should pay 95% tax on selling a second house. You can only live in one at a time dammit.

While I sympathise with the position you find yourself in, what you suggest is wholly unrealistic.

What about the people who prefer to rent rather than to buy? Despite your own preference and desire to buy, not everyone wants to or is able to do that. So, where`s the incentive for someone to buy a second property to do up and rent out if, on your proposal, they will get hammered when they come to sell it. Jeez........

It`s a free market economy. If someone is able to afford to invest in property, how is that any different to investing in, say, the stock market or bonds or just sticking it in the bank? There is no god-given right to own property. The market sets the level of price bases on supply and demand. I`m sorry that you`re finding it difficult to find somewhere to buy but you can hardly expect the economy to be geared towards making life easy for you, can you......?!

The problem is deeper and is, in my view, largely a result of successive governments (of whatever political persuasion) making it increasingly difficult to build new properties, especially affordable ones. That skews the market. Taxing property sales isn`t the answer. That would just send the market the other way and dissuade people from moving house. That kills labour mobility because people can`t afford/can`t be arsed to move and get a hefty tax bill, so the economy stagnates.

Quote:
What about the people who prefer to rent rather than to buy? Despite your own preference and desire to buy, not everyone wants to or is able to do that. So, where`s the incentive for someone to buy a second property to do up and rent out if, on your proposal, they will get hammered when they come to sell it

Very few people prefer to rent than buy. Those that are unable to buy (such as myself!!), are usually in that position because property prices are so high, for the reasons i outlined above. There is also ample opportuity to make profit on the rent, and then when you sell the property you will still get more for it than what you paid, so whats the problem? Just because it hasn`t gone up by 800% or something..

Quote:
It`s a free market economy. If someone is able to afford to invest in property, how is that any different to investing in, say, the stock market or bonds or just sticking it in the bank?

The whole point is that houses are not just another commodity, but somewhere to live, and raise a family. It is a shame that society has reached a stage where homes are just a commodity, and people own them for the sole purpose of making money. If you have a spare £500k then buy some shares with it, not another house. And before you say ` but there is a better return on property` there won`t be if you got taxed 90% :p

Quote:
...There is no god-given right to own property.

No, but the UN human rights thing (i think its that one) does say that every human being has a right to shelter (and freedom from fear of attack or something?), which at the moment, i am finding it very difficult to find :/

Quote:
Taxing property sales isn`t the answer. That would just send the market the other way and dissuade people from moving house. That kills labour mobility because people can`t afford/can`t be arsed to move and get a hefty tax bill, so the economy stagnates

Only if you tax primary residence. I am talking about 2nd, 3rd or 4th properties, which will have absolutely no impact on mobility.


The problem here is stupid tv shows that say `why don`t you buy a cheap house that a 1st time buyer could afford, then do it up and sell it so they can`t afford it and cash in on their misfortune.` Well, as i said, in the end, when 1st time buyers disappear (which they will), the market will come to a halt.

The governments plans to charge uni top up fees will help to acceleratethis process in the next 5 years too.

....and, of course, if YOU had the money to buy a second property, do it up and sell it for a profit you wouldn`t?

Houses are a fantastic way of making money and if I had the chance I would (as it turns out I can only afford to live where I do due to the combined income of myself and the wife).

I think that your comments are born out of frustration Uncharged - although I do sympathise heavily as if it wasn`t for my wife I`d have little to no chance to buy somewhere round here.

Simple solution - get a wife that earns more than you! :D :D :D

Quote:
and, of course, if YOU had the money to buy a second property, do it up and sell it for a profit you wouldn`t?

have to say that i`m a gambling man, so i would be more inclined to dable in the stock market, or alternatively try my hand at the vegas tables :D

The advice about a rich wife is good though...

UC
_____________________
...some kind of superstar*