House Buying - value of white goods / furnishings

Gopes

Dear All,
I am currently in the process of house-hunting, and have viewed a number of properties. Our maximum budget was £250k, for stamp duty reasons, but we could afford to go a bit higher (including the higher stamp duty levels).

We have seen a house that we really like, and might be tempted to put an offer in. The house is on the market for £255k-£285k, and apparantly has had a couple of offers rejected at £250k.

The agent said that they may be willing to accept an offer in the region of £260k.

To cut a long story short, we are thinking of making an offer at £255k - but clearly, that will mean that we have to pay an extra £5k (difference between 1% and 3% stamp duty).

The house is decorated to quite a high spec, with a nice kitchen/bathroom, and so we were wondering whether there was any mileage in making an offer for the house, and then an additional cash sum for the fixtures, fittings and white goods - and if so, is £5k likely to be unreasonably high.

I am aware that HMRC would pay close attention to any purchase just below £250k, and don't want to break any laws, or get into trouble for stamp duty evasion...

I could just cough up the additional stamp-duty (eye-watering as it is), but was interested to know, if anyone had come up with any (legitimate) ways of avoiding the increment, for properties just above the threshold.

Thanks
Gopes

Gwhiz

If you can justify £5K, and convince the taxman it was a fair value, then fine. If you can't.... well you know the answer.

The_Drama_Llama

But you can't claim for the cost of white goods and other furnishings as new, only second hand value. So a £500 washing machine becomes £100 (if you're lucky), blinds/curtains have very little value, esp if made to measure etc etc. HMRC scrutinises all sales around £250k very very closely indeed...but you knew that..

Jenniefour

You could ask them to make a contribution to the stamp duty - any good?

GavB79

If they will take 260, why is it up for 255? I hate this trend for putting ranges on houses. To be on at 255 and not expect to accept 250 due to stamp duty is ridiculous!

G_M

buckfast67uk wrote: »

5k could be just about justified.

Get them to include curtains and blinds. The blinds in our living room alone cost about £300. How much does a dishwasher cost nowadays? £300-500, washing machine? £500+, tumble drier? £150. Any garden furniture present, bench/bird table etc. These things all cost cash. If in doubt take a note of the model numbers of the appliances in question and find out how much they cost from a reputable retailer. Make a list - you may be surprised how much it chots up to

Sorry - this is poor advice. It is the 2nd hand value that counts, not new!

Look at ebay and you'll soon find that blinds, dishwashers, garden furniture sell for peanuts. Getting it all up to £5000 will be hard.

HMRC are not dumb, though they are short-staffed!

Gopes

Jenniefour wrote: »

You could ask them to make a contribution to the stamp duty - any good?

Surely, that wouldn't really change anything - i.e. to the vendor, what is the difference between selling the propert for e.g. £250k, or selling for £255k, but offering to pay the difference between the 1% and the 3% tax bands? In other words, any contribution that they would consider making towards stamp duty, would be likely to be covered by an increase in asking price? Or am I missing something?

It seems we may just have to "grin and bear it".

One other springs to mind: presumably the vendor, upon completion, would be a fair amount in Estate Agents fees (assuming 2% of sale price, that would be £5k). Would offering to pay the estate agent fees as buyer, be a way forward, or would HMRC view it has fraudulent evasion of stamp duty?

I suspect that HMRC probably would take a dim view of such practice - but I am struggling to see on what grounds - ultimately, the fees are not an explicit part of the purchase price - and so it seems a bit unreasonable that implicitly, the buyer is paying stamp duty on the estate agent fees...

Thanks again, for everyone's advice.
Gopes

The_Drama_Llama

The vendor needs to get real and sell for £250k...and his EA should be beating him around the head with this fact. Repeatedly.

hazyjo

I agree with The Drama Llama above.

In the 'olden days', if there'd been a queue of people for this house, they might have got towards the top of that bracket.

Anything in today's market priced between £251k-275k (at the very least) has a very low chance of selling at that price.

Unfortunately, it's what happens to houses 'worth' just above that stamp duty threshold. I'm in the same boat - tried for £265k but not a cat in hell's chance - even where I am, where houses in my road and three roads around it used to sell within days. Am now selling (after losing an offer at £247k) at £228,500.

Even if I LOVED the house, there's no way I'd pay £255k for it, or even £265k. Nobody else would, so you might as well leave your offer on the table for when (yes, when) they have to admit defeat.

Jx

Gopes

True - but if they already have a couple of offers at £250k on the table, they can probably afford to hold out to see if someone gets desperate, and offers more. To be honest, i looked at 6 properties in the same area, all priced at about £250ish, and this one was significantly better than any of the others, which makes me think that if the others are accurately priced at £250k, then this is arguably worth somewhat more - I actually thought when I was viewing it, that it had been priced at £280k - and was still interested. It was only when I got home, and reviewed the website, that I saw it was priced at £255k-£285k!

if only HMRC (Inland Revenue) hadn't come up with such a moronic way of calculating stamp duty - why can't they just go with a layered system (e.g. 1% on the first £250k, then x% for the next chunk, and then y% for a further chunk - i.e. in the same way that income tax is charged). That would be far more logical, fairer for all concerned, and would avoid these stupid deliberations, for properties priced near to the threshold, which would also allow vendors to price their properties at a fair value.

Grrrr.

hazyjo

Are you sure that's why the offers were rejected, and it wasn't a case of the buyers not being able to proceed? Maybe they'd not actually got a complete chain. EAs are very careful as to how things are worded sometimes.

As the other 'offers' prove, nobody else is willing to go over £250k.

It doesn't matter if three houses are vastly different and would be priced at say £250k, £265k or even £275+. In this market, they'll all be 'worth' £250k. Annoying, frustrating, whatever, yes. But that's how it is. Gutting for me too as mine dropped down like a rock once the recession hit.

I've no idea why they can't do what you said - it's what I've been saying for years. Makes far more sense to me, and I believe the 'moronic' stamp duty thresholds are partly responsible for the bloomin' recession!

Not complaining too loudly though as we're jumping to the next 'bracket' and have saved a bomb on the next one

Jx