Don’t buy a new home without selling your old one first warn tax experts

UK200Group, which represents 600 partners from across legal and accounting firms, is warning buyers not to purchase a new home without selling their old one first, unless they are prepared to pay thousands extra in taxes if the sale is delayed.

The UK200Group is also calling for the HMRC to defer the potential requirement to pay Capital Gains Tax on unsold homes for those who purchased a new home and fail to sell the old home within 9 months of moving out.

Currently, If you move home but can’t find a buyer for your current home you pay a 3% Stamp Duty Land Tax surcharge on your new property and have three years to sell your former home and reclaim the 3%.

Additionally, there is the risk that Capital Gains Tax could be liable if you the former property can’t be sold within 9 months of moving out.

Andrew Jackson, Head of Corporate Tax, Fiander Tovell and Chair of the Tax Panel of the UK200Group, comments:

“With a significant possibility that the housing market will stall or slow down many people who chose to purchase a new property but without having a buyer for their old home could find themselves tens of thousands of pounds out of pocket. That is why we are calling on HMRC to relax the deadlines on selling the former home. In the meantime, our advice is to think very hard about the possibility that your old home could take longer to sell than you expect.”

Kindly shared by UK200Group