You found the right home and couldn't risk losing it, so you bought before selling. Now two mortgages leave your account every month, the old house sits empty, and every week without a buyer costs you money. Here's how to get through it, including the Stamp Duty you may be able to claim back.
This guide is general information, not legal or tax advice. Take advice on your own situation.
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Key takeaways
- Buying before selling usually means paying the higher rates of Stamp Duty.
- Sell your old home within three years and you can claim the extra back.
- Claim within 12 months of the sale, or of the new home's return filing date, whichever is later.
- An empty old home still costs around £1,000 to £1,700 a month to run.
- Short stays can cover the costs while it sells, with your lender's consent.
Contents
Did you pay extra Stamp Duty?
Probably. If you owned your old home when you completed on the new one, you'll usually have paid the higher rates for additional properties. The good news: you can often claim the extra back.
How do you reclaim the extra Stamp Duty?
GOV.UK explains that If you sell or give away your previous main home within 3 years of buying your new home you can apply for a refund of the higher SDLT rate part of your Stamp Duty bill. The claim has a deadline: for sales on or after 29 October 2018, HMRC states it must receive the request by the later of 12 months after the date of sale or 12 months after the filing date of the return for your new home.
You can't get the refund if you or your spouse still own any part of the old home. Put the deadline in your diary on the day your old home completes.
What does paying two mortgages really cost?
More than the two mortgage payments. The old home still needs council tax, insurance, energy and checks. Springbok Properties notes these running costs are commonly £1,000 to £1,700 a month on a home waiting to sell.
How can you cut the cost while you wait?
- Price the old home realistically, because homes priced right from the start sell far faster.
- Claim the council tax for-sale exception, which protects an empty home on the market from premiums for up to 12 months.
- Talk to your lender if the payments are hard to meet.
- Let the old home on short stays while it sells, with viewings put first, so the income covers its costs.
Do you need your lender's permission to let the old home?
Usually, yes. London Money quotes a lender warning that letting without consent is in breach of their contract. Ask your lender before taking any bookings, and tell your insurer.
What about a tenancy on the old home?
A tenancy makes a sale much harder, because tenants now have rolling tenancies and you'd need a legal ground and months of notice to get the home back empty. Short stays keep the home free for viewings and completion.
Frequently asked questions
Can I get my extra Stamp Duty back?
Usually, yes, if you sell your previous main home within three years of buying the new one.
How long do I have to claim the Stamp Duty refund?
Until the later of 12 months after the sale, or 12 months after the filing date of the new home's return.
Can I let my old house while it sells?
Often, yes, on short stays, with your lender's and insurer's agreement.
Should I rent my old house to a tenant?
It makes selling harder, because getting the home back takes a legal ground and months of notice.
What if I can't afford both mortgages?
Talk to your lender early, and review your asking price with your agent.
Related guides
Sources
This is general information, not legal, financial, tax or insurance advice. Market figures are averages as of the date shown above and change every month. Speak to a qualified professional before you act on anything here.