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Vendor pays stamp duty?
Mrs_Mak
Posts: 5 Forumite
Hello
Sorry if this has been addressed before......
Can our vendor pay part of our stamp duty?
Or give us cash-back once the sale is completed?
(I have seen these type of deals offered on new-builds etc)
I am a FTB. I have agreed a £290k purchase price. I am paying 10% (£29k) deposit & have a £261k mortgage offer. I have just enough in savings to pay the stamp duty (£8700) & fees. The survey revealed there is approx £10k of work required. I have agreed with the vendor to split this half-way.
However, I don't just want to get a £5k reduction in the price because, although it would result in a saving of £500 from the deposit, £150 SD and slightly lower monthly payments - it means that I won't actually have the £5k cash in my pocket to complete the work. We can't ask the mortgage company to loan us the same £261k versus a £285k price as it changes the LTV to over 90% - and of course they don't offer this rate. Another option would be to get the vendors to complete £5k-worth of work before we complete but we are in a bit of a rush to move in.
Can anyone advise on what options we have?
Has anybody else had this experience?
Many Thanks!
Sorry if this has been addressed before......
Can our vendor pay part of our stamp duty?
Or give us cash-back once the sale is completed?
(I have seen these type of deals offered on new-builds etc)
I am a FTB. I have agreed a £290k purchase price. I am paying 10% (£29k) deposit & have a £261k mortgage offer. I have just enough in savings to pay the stamp duty (£8700) & fees. The survey revealed there is approx £10k of work required. I have agreed with the vendor to split this half-way.
However, I don't just want to get a £5k reduction in the price because, although it would result in a saving of £500 from the deposit, £150 SD and slightly lower monthly payments - it means that I won't actually have the £5k cash in my pocket to complete the work. We can't ask the mortgage company to loan us the same £261k versus a £285k price as it changes the LTV to over 90% - and of course they don't offer this rate. Another option would be to get the vendors to complete £5k-worth of work before we complete but we are in a bit of a rush to move in.
Can anyone advise on what options we have?
Has anybody else had this experience?
Many Thanks!
0
Comments
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you can buy the house for an extra 8k and then ask the vendor to pay the stamp duty. This just means that instead of having a lump sum to pay, you would spread it over the cost of your mortgage and it would increase you LTV availability.Smile though your bank is breaking:)0
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you can buy the house for an extra 8k and then ask the vendor to pay the stamp duty. This just means that instead of having a lump sum to pay, you would spread it over the cost of your mortgage and it would increase you LTV availability.
That might work - but is the lender going to value the property for £8K more?
Problem with the original scenario (as I suspect 54druids worked out) is that having the seller pay the SDLT is an incentive that your solicitor will have to reveal to the lender so it might well still reduce its offer.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0 -
Thanks both.
I doubt the mortgage company would be happy to increase the valuation.
Would it be illegal to make arrangements directly with the seller without declaring it to either my solicitor or my lender?
Cheers.0 -
It is interesting that Richard says that you would have to report that the Seller was paying the stamp duty and that may change their stance on things ... I wouldn't have thought it would make much difference where the money comes from, it isn't like it is part of the deposit is it... From personal experience I can't think where in the mortgage procedure the mortgage advisor would ask about where your stamp duty payment is coming from?
You'd have to involve the solicitor; they take the SD payment so they'd notice if it wasn't from you! Again, i don't think they'd care where it came from.
When I was finding out about SD issues, it seemed that getting the vendor to pay the stamp duty directly was just about the only straightforward and legal way to get around not having to pay it yourself (as the buyer).0 -
Would it be illegal to make arrangements directly with the seller without declaring it to either my solicitor or my lender?
Yes, it would be a fraud on the lender, and anyway how would be sure the seller would honour the deal?It is interesting that Richard says that you would have to report that the Seller was paying the stamp duty and that may change their stance on things ... I wouldn't have thought it would make much difference where the money comes from, it isn't like it is part of the deposit is it... From personal experience I can't think where in the mortgage procedure the mortgage advisor would ask about where your stamp duty payment is coming from?
It doesn't matter what it is, it is a way of disguising a price reduction, and has to be reported.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0 -
Richard_Webster wrote: »Yes, it would be a fraud on the lender, and anyway how would be sure the seller would honour the deal?
Good point! Thanks.
It doesn't matter what it is, it is a way of disguising a price reduction, and has to be reported.
Do you think the lender would automatically have issue with the vendor paying towards stamp duty or is there a chance that they would say it is ok?
Cheers0 -
We had a similar situation where it was agreed we would pay for half and so would the sellers we arranged for a quote and then booked the work our solicitor drew up some papers and the money was deposited into an account we then had this money on completion transfered to us it al worked well and we split the cost of the legal work which was only 52.500
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Thanks for this - really good to know that its all possible!0
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