Seller pays stamp duty - can we do this?

lowriful

brit what I am suggesting would be openly declared as a "buyer's incentive" so it's hardly fraud!

We can't simply drop our price as we're stuck on the no man's land just above the stamp duty threshold. I'm not prepared to put it down to £250K as it's worth more than that.

If I want a decent price, and offering to pay stamp duty won't work, then as far as I can tell my only option is to rent the flat out, and wait until the market moves (up or down) and takes the price to a position when stamp duty thresholds aren't an issue.

Actually I wouldn't mind if prices dropped over all. For me, it's not about trying to get the biggest value. What matters to me is the difference in price between my current area (inner London) and the town outside of London that we want to move to. As London consistently outperforms other markets we should hopefully be in a better position, no matter which way the market goes, I hope!

Yorkie1

lowriful wrote: »

Yorkie I've seen lots of examples of "seller pays stamp" on properties which aren't new-build.

It must work for some people, surely?

As I say, it can be advertised quite legally. But if the buyer actually needs a mortgage, there aren't any lenders around any longer which will offer a mortgage in these circumstances.

All you're seeing is the advert. Not the eventual outcome.

It was possible in years gone by, but as I understand it from regular postings on this forum from the Mortgage brokers, no mortgages will be granted on this basis these days.

the.ciscokid

lowriful wrote: »

brit what I am suggesting would be openly declared as a "buyer's incentive" so it's hardly fraud!

We can't simply drop our price as we're stuck on the no man's land just above the stamp duty threshold. I'm not prepared to put it down to £250K as it's worth more than that.

If I want a decent price, and offering to pay stamp duty won't work, then as far as I can tell my only option is to rent the flat out, and wait until the market moves (up or down) and takes the price to a position when stamp duty thresholds aren't an issue.

Actually I wouldn't mind if prices dropped over all. For me, it's not about trying to get the biggest value. What matters to me is the difference in price between my current area (inner London) and the town outside of London that we want to move to. As London consistently outperforms other markets we should hopefully be in a better position, no matter which way the market goes, I hope!

If that is the case, someone will pay what you want for it, won't they... or am I missing something?

lowriful

If that is the case, someone will pay what you want for it, won't they... or am I missing something?

Yes, what you're missing is that there's a bit of a no-mans land at just over stamp duty, as it jumps from £2,500 to £7,500+

It means - as far as I can tell - that very few people won't offer anything in the £250Ks, and many are put off offering in the £260Ks as it's such a big jump.

That's not to say that no one will do it, but that it's a harder sell.

littlesparkles

The lenders I listed are the ones that were okay with stamp duty being paid - but yes it's a new build. I don't know if this makes a difference.

Yorkie1

littlesparkles wrote: »

The lenders I listed are the ones that were okay with stamp duty being paid - but yes it's a new build. I don't know if this makes a difference.

Yes, it makes all the difference. The mortgages relating to vendor gifted deposits only apply to new builds (and where it's a sale at an undervalue by a family member - which will not be the case where the property is advertised on the open market as is the case on this thread).

brit1234

lowriful wrote: »

brit what I am suggesting would be openly declared as a "buyer's incentive" so it's hardly fraud!

So what price will you register with the Land Registry then? See it is normally the selling price but in your case it is a corrupted figure. So your property sale price on official records will be false and artificially high. This gift deposit scheme has been used as a major cause in fraud over the last decade and contributed to the housing bubble.

Even if you can find a buyer who can get a gift deposit mortgage how will you get the right price registered, or will you let the false one be registered (which will negatively effect other first time buyers).

lowriful wrote: »

We can't simply drop our price as we're stuck on the no man's land just above the stamp duty threshold. I'm not prepared to put it down to £250K as it's worth more than that.

If I want a decent price, and offering to pay stamp duty won't work, then as far as I can tell my only option is to rent the flat out, and wait until the market moves (up or down) and takes the price to a position when stamp duty thresholds aren't an issue.

It is worth what someone is prepared to pay for it not what you think it is worth. You are better selling sooner than later with the peak selling time now in September. Any latter and you risk further loses.

lowriful wrote: »

Actually I wouldn't mind if prices dropped over all. For me, it's not about trying to get the biggest value. What matters to me is the difference in price between my current area (inner London) and the town outside of London that we want to move to. As London consistently outperforms other markets we should hopefully be in a better position, no matter which way the market goes, I hope!

Till the end of the Olympics, London is is a big housing bubble on top of a national one. It will go pop at some time. I suggest it will happen in East London first after the Olympics finishes and reality sets in as the hype dies.

john_white

So, I'm guessing you have not had any offers at 250k? Surely that's the first thing? Get a 250k offer and if they say if it's due to the extra 2% you will knock it off.

Personally I see the offer of paying the SD a very strong indicator that you want much more than 250k I.e at least 265k so you can still pay the SD and have more than 250k left over. So again personally I wouldn't bother making an offer as it seems there is little room to negotiate

Crazywoman27

I'm having a nightmare with this stamp duty lark..... I am in the process of purchasing a propery offered just below the stamp duty threshold , offer rejected, mortgage advisor told me to offer the extra ( to cover the stamp duty) and ask the seller to pay it , which we did, now 8 weeks later we are having to have our mortgage revised as the mortgage company will not make an allowance for stamp duty. I'm so annoyed with the mortgage advisor who has since been uncontactable ..... I am going to make a complaint as surely she shouldn't have advised me to do this? I didn't know the ins and outs of stamp duty I wish I had:-(

Bigglesuk

Crazywoman27 wrote: »

I'm having a nightmare with this stamp dutylark..... I am in the process of purchasing a propery offered just below thestamp duty threshold , offer rejected, mortgage advisor told me to offer theextra ( to cover the stamp duty) and ask the seller to pay it , which we did,now 8 weeks later we are having to have our mortgage revised as the mortgagecompany will not make an allowance for stamp duty. I'm so annoyed with themortgage advisor who has since been uncontactable ..... I am going to make acomplaint as surely she shouldn't have advised me to do this? I didn't know theins and outs of stamp duty I wish I had:-(

I know this is a slightly old thread but i would like to revive it a bit.

I've hit a similar issue. However I didn’t start the mortgage process. I chased 5 mortgage companies personally, and went to 2 Mortgage advisors.

Some mortgage brokers allow the "Vendor Gift of Stamp Duty/Deposit" however most class it as a sales incentive and will either take it off the value of the amount they will loan, or look for the value of the valuation on the property for the amount minus the gift.

My issue was property on market for £265k. Needs a hell of a lot of work doing to it (Been neglected since being built in the mid 70's), and I need to keep some of my savings to do it up (20-30k).

Vendor is offering the stamp duty as a gift. They would not accept £250k with me paying stamp duty, as they were looking to come away with £255k. They did accept my conditional offer of £263k based on the fact I could obtain a mortgage that accepted the gifted stamp duty. 2 weeks of daily phone calls later and I’m no closer to finding one that works. I may have to re-negotiate with the vendor, but my solicitors recommended not attempting the fixtures and fittings approach at the 250k mark as that has been cracked down a lot.

If the place wasn’t in such dire need of renovation I would of happily paid the £263k and stamp duty.

If anyone has any thoughts that might help I would appreciate it.