Developer paying stamp duty

SilverSix

That's why I was a little taken back to find out that £260,000 included stamp duty!

Such a ball ache don't see why they can't just do this a much simpler way!

JQ.

BennyC wrote: »

That's why I was a little taken back to find out that £260,000 included stamp duty!

Such a ball ache don't see why they can't just do this a much simpler way!

Because they want the Land Registry to show you paid £260,000, so that when the developer sells their next house on the estate they'll tell the suckers that you paid £260,000. The potential buyers can then check this info on the internet and decide that the house is worth £260,000 because that's what you paid.

They'll then get those buyers to pay £270,000 but offer to pay the stamp duty so they actually pay £260,000, the "real" value, demonstrated by your purchase. . . . . and on it goes up and up.

brit1234

JQ. wrote: »

Because they want the Land Registry to show you paid £260,000, so that when the developer sells their next house on the estate they'll tell the suckers that you paid £260,000. The potential buyers can then check this info on the internet and decide that the house is worth £260,000 because that's what you paid.

They'll then get those buyers to pay £270,000 but offer to pay the stamp duty so they actually pay £260,000, the "real" value, demonstrated by your purchase. . . . . and on it goes up and up.

Yeap I agree its the gift deposit land registry fraud all over again. Pay £250k or walk away.

SilverSix

@JG: I see.

brit1234 wrote: »

Yeap I agree its the gift deposit land registry fraud all over again. Pay £250k or walk away.

Is what they're doing actually fraud? I'll google this and mention it to my solictor. It's one the developer 'recommended/uses' I was going to ask them to clarify everything for me but I'll mention this too.

MegS

I have one thing to say do NOT use the solicitor recommended/used by the developer, look for your own solicitor now before you get too far down the line.

CloudCuckooLand

Seconded;

DO NOT use the developer's solicitor.

JQ.

BennyC wrote: »

@JG: I see.



Is what they're doing actually fraud? I'll google this and mention it to my solictor. It's one the developer 'recommended/uses' I was going to ask them to clarify everything for me but I'll mention this too.

No it's not. It only becomes fraud if you don't tell your mortgage company about the incentive, and they therefore base their LTV on the £260,000 hypothetical purchase price and not the actual net purchase price of £250,000

Richard_Webster

Remember that most sensible mortgage lenders will consider the price for loan to value purposes to be £252,200 and they will only lend you their maximum percentage of that sum.

SilverSix

The amount I am borrowing is only half what they were willing to lend so there is room for movement here, however I am pretty sure my lender is aware of my incentives though I will double check this.

Unfortunatley I had already started to use their solicitor so there isn't a great deal I can do about it now.

I spoke to the solicitor who wasn't really able to clarify anything for me due to not knowing how the developer works. Though she did say I will pay the purchase price which is currently agreed at £260,000, why it's not been agreed at £252,200 is what I will be asking the developer when they open in 15 minutes. I expect them to tell me this is due to it affecting the average sale price of that particular build which is fair enough. However I will want it in writing that my stamp duty incentive is to be removed from the £260,000 'purchase' price.

It seems to be that the contract as it stands won't be complete if the stamp duty is paid by the developer of £7800 and I only give £252,200 for the house when it has £260,000 on the contract.

Erghh...

SilverSix

Right, well they probably couldn't make it any more confusing if they tried.

Bottom line is as I thought, £260,000 to pay to my solicitor.

Their 'net price' of '£251,200' is what it costs them not me (what they'll have left after my incentives have been deducted from it by them, not what I pay). I was right in thinking that stamp duty and £1k towards fees would be added on after if they weren't given to me as incentives.