Stamp Duty....applicable

Hughesy84

Ok does anyone know the laws around stamp duty? Is it based on the price paid or the valuation of the house?

Theoretical question -
I.e. If a house is worth £200k, but I get it for £1 - would I have to pay any other costs?

Its not important - its just something useless I want for my knowledge :rotfl:

Nick_Cardiff

As far as i understand it is based on the sale agreed price in the contract. so if valued at 250k but is actaully bought for a £1 then no stamp duty is applicable. SD is only payable over 175k. So if valued at 250k but sold for 180k you would only pay SD on the 180K or part thereof.

Mikeyorks

Hughesy84 wrote: »

Is it based on the price paid or the valuation of the house?

Neither. It's based on the 'chargeable consideration'.

In most cases that will be the purchase price .... but it could include transfer for a debt / work done etc.

I wish anyone luck that attempts to pass an SDLT form to HMRC showing a consideration of £1. It's the cue for a investigation.

Hughesy84

There will be no transfer of debt....nothing dodgy.

The seller wants £250k for the house....they get it.....but the new owner gets it for £1.

The mortgage company therefore gets paid off, and the new owner gets it for £1 and is mortgage free.

Would there be anything illegal in this? And would they be due any sort of costs?

Is Solicitor costs for change of title on deed the only one?

CLAPTON

how does the seller get 250,000 for the property if the new owner gets it for £1?

G_M

The other £249,999 comes from hf.

£239,999 of this goes to the mortgage lender to pay off the mortgage.
£200 goes in mortgage lender's legal fees and
£300 goes in purchaser's legal fees
Another £500 goes in searches, TT fees etc.
No survey is done as the house is made of bricks, not paper, so clearly the wolf can't blow the house down.
The seller (who is on the point of bankrupcy) is p*ssed off about losing his home and, although he got £250K, is now down to £9K, so he takes the fitted kitchen with him to start again with. And the bathroom suite. And lightbulbs. So the buyer has to fork out £15K on renovations just to get it habitable.

Then the taxman comes calling, wondering how this £1 sale was set up.

Buyer says: "£250K? Me pay that? No way! That was the house fairy!"

laticsforlife

mental, just mental.

McKneff

laticsforlife wrote: »

mental, just mental.

:rotfl::rotfl::rotfl:
I got this mental picture of you just sat there despairingly shaking your head from side to side, it really did make me laugh