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Q&As
How long should I live somewhere for it to be primary residence?
Hi,
I am a newby and have a question for the experts on here.
I have a plot within my garden and want to build a house on it for profit. I am willing to live in it, if required, so that I can sell it as if it is my principal residence and to avoid paying any form of tax, but how long would I have to live in it to prove that it is my primary residence.
I wish to retain my original house which can be let whilst I am living in the new house.
Thanking you in anticipation.
One Answer
With the caveat that I’m not a tax adviser, my view is that if you build a second home and retain the first, you will have some tax liability. With the new home, it may be liable for CIL, for which self builders can claim an exemption, but you will need to live in the new property for 3 years without renting it out or selling it, otherwise the full CIL due will become payable. You will need to declare one of the houses as your principal private residence, I’m assuming the new build, and if you rent the other out, the income from this will be taxable and if you sell it, any capital gains tax due will have to be paid according to your personal circumstances. You would benefit from having a professional tax advisor look at this to minimise your tax liabilities and to avoid any nasty surprises.