Stamp duty

Mathew

Is stamp duty based on purchase value or true value? Buying a property of a family member at 249K, suspect building society valuation may come in higher.

Thanks

Typhoon2000

Its based on the purchase price.

holly_hobby

Usually on the price paid for the property - if you are a first time buyer (not held an interest in another property) you qualify for 100% Stamp Duty Land Tax (SDLT) exemption up to £250k (this exemption expires March 2012)

If you are not a FTB, then SDLT applies of 1% on £249k pch price.

Full explanations and HMRC regs regarding SDLT which may help clairfy things further for you are here:- http://www.hmrc.gov.uk/sdlt/calculate/value.htm

If this is a connected (heavily) discounted sale, with the pch price obviously designed to evade/mitigate SDLT, then it may be on the true market value. Your solicitor should be able to advise ...

Hope this helps

Holly

JimmyTheWig

I believe in this instance it will be based on the true value, but have no eveidence to back this up.

GlynD

Based on the purchase price. True value is a subjective thing. Been there, got the teeshirt.

beecher2

Is the family member giving you a gifted deposit?

Mathew

Hi,
Thanks for your advice,
Not a first time buyer so not exempt.
Everything seems to be pointing at purchase price which is good news, thanks again.

GlynD

It's all pointing at purchase price because that's the correct answer. I'm 100% positive.

JimmyTheWig

How much more do you think the valuation would be?
Has an estate agent valued it? If so, how much did they say to put it on for?

Can you, honestly and truthfully, say that you are paying £249k?
You're not buying anything else (e.g. furnature) from this family member for a large sum around the same time?
Or choosing to give them a large sum of money as a gift?

The thing is, what some people do when they have a house worth, say, £259k (of which £1k is fixtures and fittings) is sell the house for £249k and the fixtures and fittings for £10k.
This is illegal.
And for this reason, sales just under the threshold are often investigated to see if this has happened.

What I'm saying is that if everything isn't above board there is a fair chance you will get caught out.

Mathew

Estate agent said if you wanted it shifted quick put it up for 275, this was 12 months ago.
Yes, I can honestly say I'm buying it for 249K.
Just got off phone to solicitor who's now instructed to deal, who has confirmed all the aforementioned ie based on purchase price.