Part Ex, can Stamp Duty be avoided by selling 4 less??

Dr_Zemf

Hi

I wonder if someone knows the ins and outs of part exchange, as in principal if we exchange our house (no mortgage, hence no value required) with another owner for a similar amount, and if both of these houses are not on the market, why should we be forced to sell our homes at a 'percieved market value' that would then force us to pay a considerable amount of duty to the taxman??

My house would be valued at around £270k, what's to say it can't be sold for £249k (to reduce it from 3% to 1%) or better still £1 (no stamp duty at all), surely a house is only worth what somebody is willing to pay, or what the seller decides to sell it for!!

Surely the government cannot dictate what our houses are sold for??

Thanks in advance if you can help with the answers....

silvercar

It has to be realistic, otherwise it is tax avoidance.

In the present market it is realistic to say that nothing would sell on the open market at 270k, precisely because of the stamp duty hike, so 249k is realistic.

liz-paul

I believe the govt can chase you up if they find out you sold for an unrealistic price to avoid paying tax i.e. £1. Lowering your price from £270 to £250 to bring you under the 3% band is probably very realistic in the current market.

Robert_Sterling_3

silvercar wrote: »

It has to be realistic, otherwise it is tax avoidance.

It would be Tax Evasion which is illegal and not Tax Avoidance which is Legal.

Robert_Sterling_3

Dr_Zemf wrote: »

Surely the government cannot dictate what our houses are sold for??

No but thay can and do decide how much Land Tax Stamp Duty you pay.