£250k Stamp Duty Impact

Darkboi

Please help

Been lurking on these boards since I started to consider a purchase and you have all been very helpful, but I have a few questions before I place an offer on a flat:

1) If purchasing a flat for say £250k can you put the garage through for £5k if they are not joined to avoid paying stamp duty?

2) I know this is pure speculation, but assuming the current bands stay as they are what will the chances be of selling the property again in 5-7 years for anything more than £250k

3) Can two flats in the same building be valued more than £20k apart, based on one being bigger and in a much better decorative order? i.e. no work needed. The cheaper one would require a new kitchen and bathroom.

All contributions would be appreciated

hethmar

Where is the property?

1. No - that would be fiddling. There used to be a ruse where you bought the "contents" separately to avoid stamp duty but I believe that was also jumped upon.

2. Dont know, probably.

3. Of course.

Darkboi

Thanks Hethmar

The property is in Finchley North London.

regarding the garage, someone suggested I could get a family member to buy it, and I
would buy it off them at a later date. Is that an option

hethmar

Oh Finchley, very nice

Are they selling the garage separately then?

I expect more knowledgeable people will be along shortly Darkboi to give you better help than I can. Whatever you decide, very best of luck.

00ec25

Darkboi wrote: »

regarding the garage, someone suggested I could get a family member to buy it, and I
would buy it off them at a later date. Is that an option

the vendors solicitor is required to comply with the stamp duty rules, there are detailed rules relating to "linked transactions" whcih cover a single vendor trying various ways to split what is in reality a single property into 2 or more transactions so as to come in under the tax threshold

it is unlikley that the vendors solictor would agree to allowing the garage to be sold in such an amateurish and obvious tax evasion dodge

Grimbal

I think it's a no as it would be considered a "linked transaction". From the HMRC website:

When is an SDLT transaction treated as linked?
HM Revenue & Customs (HMRC) will consider transactions to be linked if all of the following apply:

• there is more than one transaction
• the transactions are between the same buyer and seller - or between people connected with either of them
• the transactions form part of a single arrangement or scheme or part of a series of transactions

Edit: 00ec25 beat me to it !

Darkboi

I had searched on the direct.gov.uk website for something on the related transactions

Thanks for the advice. It is amazing what estate agents tell you as a first time buyer.

nell53

Re no 2: Don't know if this is typical but a friend purchased a posh 2 bed flat in a posh part of Bristol [Clifton] in 2002 for £249,950 and has just had it valued at the same. The agent confirmed the only reason for this was due to the stamp duty threshold.

Darkboi

nell53 wrote: »

Re no 2: Don't know if this is typical but a friend purchased a posh 2 bed flat in a posh part of Bristol [Clifton] in 2002 for £249,950 and has just had it valued at the same. The agent confirmed the only reason for this was due to the stamp duty threshold.

Although it is not an investment property, my fear is when the family eventually comes, I will be stuck buying buying properties around the £250k mark because there will be no equity gains.

timmyt

Darkboi wrote: »

Please help

Been lurking on these boards since I started to consider a purchase and you have all been very helpful, but I have a few questions before I place an offer on a flat:

1) If purchasing a flat for say £250k can you put the garage through for £5k if they are not joined to avoid paying stamp duty? NO, that is the law. fact.

2) I know this is pure speculation, but assuming the current bands stay as they are what will the chances be of selling the property again in 5-7 years for anything more than £250k very high

3) Can two flats in the same building be valued more than £20k apart, based on one being bigger and in a much better decorative order? i.e. no work needed. The cheaper one would require a new kitchen and bathroom. of course

All contributions would be appreciated

good luck OP