Stamp Duty - ways of reducing it?

Catmeister

Looking to move to London this summer, and whilst we can afford £275-300k, and there seems to be an awful lot more 'house' for your money at this price, I really don't want to pay 3% stamp duty! (Because the figures don't give you that much more, and I'd rather pay £249k and wait to buy somewhere £350+ which should be able to by the time our family grows thus demanding the space).

Is it possible to list fittings separately, and if so, how much can you get away with, and what can this be on?

Any tips gratefully appreciated!

Richard_Webster

You pay 3% if the price exceeds £250K. So you don't need to mess around with £249,999 unless you want to save £1!

Carpets, curtains, white goods and furniture are the main things that can be included for an extra amount. but the figure must be a reasonable estimate of the second hand value of the items. Your solicitor can sort out the details of wording etc for you.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee paying clients.

Doozergirl

I think you get much better value for money in London if you look over £250,000, even if you include the 3% SDLT.

Everything in London seems to be really pushed together price wise which ends up making some larger places look cheap in comparison to others!

PoorDave

Our stupid SDLT scheme means you can actually get good deals at just above 1/4 million if you look carefully at what you're actually getting for your money, including paying that tax.

Gorgeous_George

Buy a car from the vendors of the house. Who would argue that a 1995 Ford Escort is worth £16K? Especially if it's in good condition and has a stereo radio cassette player?



GG

zzzLazyDaisy

The Stamp Duty regulations have really been tightened up in recent years. If you sell items separately to a buyer, you have to list each one, with its original price and the price you are charging for it. The closer the purchase price is to the next tier of Stamp Duty, the closer the sale will be examined for possible fraudulent declaration.

It really isn't worth it. If there really are a few items included in the purchase that could be paid for separately (carpets and curtains, mainly) then by all means do that. But it is unlikely to come to more than a couple of thousand in most cases. If you are that close to the borderline, the sellers will be expecting to have to knock the price down anyway.

You may just have to factor the cost of the higher SD into the move, as part of the over-all price. However, it is worth haggling with the sellers, some will agree to pay the SD for a quick sale (that was what I did when I sold my last house - I got the price I was looking for, the buyers got the house they wanted, everyone was happy)

Catmeister

Thanks all (especially GG - OH is SE so car even tax deductible - love it!!! :rotfl: )

Before read your posts discussed further with OH yesterday and we've decided to go for the higher end in any case - doozergirl you're right, even with excess stamp duty, it's still better value for money, and with the ever increasing possibility of price crash it'd be good to get somewhere we really like and can live in for a long time if need be. Plus there just seems to be so much more on the market at that price - when did the world get so expensive

acreed

If you are looking at properties at the £275k (rather than £300k) end of that price bracket you might find that the Vendors are already braced to receive offers at £250k from people citing the Stamp Duty threshold as their reason.

Speaking from recent (painful:sad: ) experience it can be very hard (practically impossible) to get a deal at £260k – £270k as everyone assumes they can bargain you down to £250k. From experience in Reading (myself and now 3 neighbours over the last 8-9 months) I think £275k still falls into that category.

Unfortunately, this system does drastically skew prices in this range. You should watch out for people/agents who have significantly overvalued the property just to escape from this Stamp Duty trap. I wouldn’t be at all surprise if someone selling at £280k only really expected to achieve £260k. Trouble is if they market it at £260k-£270k every joker coming through the door would try and knock them back to £250k again.

You might consider asking if the Vendor will pay the Stamp Duty in excess of £2,500 as a condition of you making an offer at the level they want. If you are going to pay them £275k then they have made £25k over the Stamp Duty threshold. Repaying £6k to you still leaves them £19k better off than they might be otherwise. Naturally, if it's a great house, someone else wil bite the bullet and outbid you but it could work.

This is pretty unlikely to work for the houses at the £290k - £300k mark as they are sufficiently far past the threshold for the argument to fall down a bit.

Hope it works out for you

Al

jangor_2

I still don't really understand the reason for the high level of stamp duty. Where does this money go, it seems absolutely extortionate to me. Most properties in the South East are now above the threshold of £250,000 with many youngsters struggling to get on the ladder. On the other side my nephew's house has been valued at a fair £260,000 and he just cannot get any buyers to the front door. I am absolutely appalled at the expenses involved in the purchase of a house over £250,000. Think I will put on my uniform and prepare for battle :mad:

Norroy

The other option for reducing the SD bill, is to offer to pay the estate agent's fee.

Clearly the vendor can then pass on this 'saving' back to the buyer in the form of a reduced price, potentially just below 250K.