Q My husband and I are looking to buy a property in the UK and our budget is about £325,000. I already own a flat in Budapest, which my parents bought for me 10 years ago, and at the time the purchase price was about £25,000. I understand that we wouldn’t be first-time buyers in the UK even if we sold the flat but I would like to find out if we would be expected to pay the higher stamp duty when buying our new home if we were to keep the Budapest property? We are both Hungarian citizens but UK residents for 10 years with a settled status.
A As you are aware, if you already own property anywhere in the world, you are liable to pay the higher stamp duty land tax (SDLT) rates when you buy a second property in England and Northern Ireland (different rules apply in Wales and Scotland). However, as you are also aware, in England and Northern Ireland if the first residential property (or a part of one) is worth £40,000 or less you don’t have to pay the higher rates of SDLT on your second property.
To convince HMRC that the first property is genuinely worth less than £40,000, you will need to get a property professional – such as an estate agent – to provide a written valuation at the time you acquire the second property. The value of the first property when you got it – in your case, £25,000 – doesn’t count.
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