Stamp Duty on £270K house

caveman38

Are there any loopholes that can be used when making a purchase on a £270K house. If say I can get it down to £260 wopuld £10K fixtures and fittings seem legit or is there another way.
It seem a shame (for want of a better word) to pay the 3% rate for the small additional amount above the £250K threshold.
Any advice please.

sebtomato

caveman38 wrote: »

Are there any loopholes that can be used when making a purchase on a £270K house. If say I can get it down to £260 wopuld £10K fixtures and fittings seem legit or is there another way.
It seem a shame (for want of a better word) to pay the 3% rate for the small additional amount above the £250K threshold.
Any advice please.

I guess it depends if it is your own money or a mortgage. If it is your own money, you can probably buy fixtures and fittings separately, and ask for the property price to be reduced. However, the tax man may inquire the sum received by the seller, and why it was such a high prices. There are probably tax implications for the seller.

If it is through a mortgage, I don't think you will be able to do such thing.

Catblue

Offer £250K maximum.

Most people who put a house on at £270K know that they are only going to get £250K at the most for it.

We looked at a house with an asking price of £280K. It later sold for £230K.

By the way, you pay 3% on the whole amount of the house - not just the amount over £250K.

pie81

Be very careful. The tax inspectors are very wise to people over-valuing fixtures and fittings (and similar ruses) in order to bring properties down below the stamp duty threshold. If you do this and are caught then it is fraud. If your solicitor is reputable they will not let you do this anyway.

For this reason it is generally very hard for vendors to sell properties at prices just above a stamp duty threshold. The vendor will know that if they have priced at £270k they are likely to receive offers at £250k, because of the threshold. I would suggest you offer at or under £250k.

PasturesNew

Fixtures and fittings as the wording isn't the way to go. There's another phrase, which I forget, which amounts to "stuff and chattels".... but to get the £20k needed for these, they'd each need to be listed/identified - AND - proven to be worth the amount you put down on the list.

So, you can't put "10 fitted carpets at £500 each = £5k" because 2nd hand fitted carpets might be only worth £1000. It is therefore virtually impossible to try to list items to the value of £20k in order to circumvent the stamp duty threshold.

You would have to genuinely be buying £20k's worth of stuff that wasn't "fixtures and fittings".

Gwhiz

caveman38 wrote: »

Are there any loopholes that can be used when making a purchase on a £270K house. If say I can get it down to £260 wopuld £10K fixtures and fittings seem legit or is there another way.
It seem a shame (for want of a better word) to pay the 3% rate for the small additional amount above the £250K threshold.
Any advice please.

As has been said 3% is on the entire £270K! It's not a tiered system.

Milliewilly

My house is on at £265K and I am well aware (and was advised by the agent) that this is a mere marketing ploy to make people think they have got money off to get below SD. Realistically houses so close to £250K will go below 3% SD unless there are people fighting for them.

not_loaded

If I was the seller I’d expect to end up at the £250,000 because of the SD.

To stand any chance of getting the ‘right’ money for the house the way I’d approach it would be at an asking price of say, £270k or £280k, to offer to pay all or part of the SD.

downshifted

Oh how I wish all sellers were that realistic. As cash buyers we offered £250k on an empty house that is on the market for £280k back in November. Not just because of SD, but also because it needs loads of work and won't fetch much more than that after a lot of hard work and expense. I researched the price well. Their rejection was followed by them putting it on with another estate agent as well - and it is still for sale with both of them! It needs structural work as well as updating and was sad cold and lonely in November (it's clearly someone's inheritance) - it will be even worse now after all the snow! It will be interesting to see how long it takes to sell (about 115 days so far!) and at what price!

Contessa

Thanks for this thread-being reminded that the 3% Stamp Duty applies to the whole of the price of a house has brought me down to earth with a bump! I'm hoping to retire to the SW this year and houses are significantly more expensive-adding the SD to the cost will hurt!!

Richard_Webster

My house is on at £265K and I am well aware (and was advised by the agent) that this is a mere marketing ploy to make people think they have got money off to get below SD. Realistically houses so close to £250K will go below 3% SD unless there are people fighting for them.

Seller probably thinks he might get offered £260K. Estate agents will suspect that the best will be £250K (you don't need to muck about with £249,995 to save the 3%) plus whatever can be reasonably paid for chattels and fittings - and with most houses you would be struggling to find stuff worth more than £2-3K secondhand.