Stamp Duty Fraud

thecasementkid

Hi everyone,

I live in a small close of eight properties in Greater London, all exactly the same size and spec etc.
Over 20 years, they sell about the same price give or take a couple of thousand (recently around £350,000).
About 6 months ago one sold and new owners moved in after some decorating.
Last week I looked at the purchase price (off the net) and was astonished to see it at £250,000, about the same price it was bought for 6 years ago.
It was up with two local estate agents for £375,000!
I suspect a stamp duty deal has gone on, but with the advent of prices sold being available on the net, can I assume this may have an effect on the next sale and create a price precedent?
If so, is there anything I can/should do?

Emmzi

there is no obligation to sell at market value - if I chose to I could sell to a friend for a fiver, totally my call.

I think you have a theoretical loss, no evidence, and no plan to actually sell up. Is that right?

rosyw

Could well be down to the personal circumstances of the seller. If, like me, they needed to sell quickly, and could afford to take a hit on the price, it's up to them, am selling mine for around £100K below market value as I simply can't afford to live in it after my OH passed away, I can afford to eat, OR I can heat the house through the winter, can't do both and I'd rather not freeze/starve.

pararct

End of the day a House is only worth what the buyer is prepared to pay for it on the day of sale.

Anything else is pure speculation.

Will it have an impact in the future? Well that's up to you as you are the one that sets the sale price for your property. You can sell below market value or well above it if you can find a buyer will to pay the sum you ask for it.

An Estate Agent will of course market a property for the most amount of money they think they can get for it but at the end of the day the decision on the sale price is purely yours.

Mortgage valuation surveyors will take note of similar local selling prices and value (for the lenders purpose) accordingly. End of the day if you think the figure is unrealistic then again you don't have to sell.

Which brings us back to a House is only worth what the buyer is prepared to pay for it on the day of sale.

So what can you do? Stop worrying about it, it doesn't matter unless you are thinking of selling and even then if there has been a correction that will also apply to the next property you buy anyway.

Edit to add, if a fraud has been committed it would have to have been done with the co-operation of a solicitor, probably both. These chaps can be struck off (even prosecuted) for getting involved in stuff like this and HMRC look closely at any sale near the thresholds.

brit1234

As the others have said, a property is worth what people are willing to pay for it. The credit boom is over and the housing bubble is deflating back to normal levels. People can only afford what current lending dictates. If it lowers your property remember it will be cheaper for you to upgrade as those properties will fall in value.

Think positive, the glass is half full.;)

googler

...or it sold for £350,000, and it was merely a clerical error on the land transaction return going to Land Registry....?

thecasementkid

Thanks guys, I appreciate your thoughts which are pretty close to my own.
However, who gets diddled if a tax fraud takes place, we all do!
I'm not sure with the "you can sell at any price" theory either as I've read elsewhere the tax man takes an interest when property is sold well below market value.

Bermuda_John

my last purchase:

for sale in 2007 ... £375k
Sold in 2007 £330k
August 2010 i bought for £181K


there was a reason for this reduction so the scenario from the OP isnt ridiculous

pararct

As is typical of some of the Greater London suburbs is your small close lined with Elm or other trees?

No doubt the property would have have had a survey conducted upon it. Maybe it threw up something very significant?

PasturesNew

Knock on his door, introduce yourself, say how marvellous his house is and how clever he was to have bought it ... and see if he offers any information about his bargain.

Of course, now he's bought for £250k, yours is only worth that now *grins*

brit1234

thecasementkid wrote: »

However, who gets diddled if a tax fraud takes place, we all do!

During the housing bubble decade the big builders gave gift deposits (y) to investors. The builders would sell them the property (x) for x-y however declare x to the landregistry. These inflated prices became the benchmark for other properties and with cheap credit and ever loosening lending standards the bubble grew and grew.

With that fraud the vast majority of people lost out expect the property people who sold before the 2007 crash.

Its not the one property that sold lower than you thought that you should be worried about but the others that will be appearing as prices fall further. Personally you should see it as a good thing as it reduces the gap when you buy a bigger one.