How much stamp duty to pay?

TwitchyT

Hello

I am uncertain about how much stamp duty to pay on our soon to be new house. I understand all off the limits for the varying percentages but would welcome your thoughts.

(For my ease of understanding the numbers stated are rounded)
The house is on the market £250,000. We have offered (and been accepted) £230,000 but still want to mortgage up to £250,000 as we will be having £20,000 worth of building work done. Will the stamp duty be calculated on the accepted cost of the house (230k) or is the stamp duty calculated on the amount mortaged (250k)? I have asked 2 indepandant mortgage advisors and they both have different opinions!

harvey115

100% mortgages are no longer available, yet alone 100+% mortgages.

TwitchyT

Sorry if i didn't explain myself properly but im not asking for a 100% mortgage. I dont understand why you are asking that?
Does the stamp duty have something to do with how much you need to borrow?

harvey115

The house price that is sent to the Land Registry is the one used for Stamp Duty purposes. The same is also used by the mortgage providers.

So first of all if you are planning on getting a mortgage on the house they will consider the lowest of either your buying price or the valuation amount. This is considered to show your LTV.

The valuation officer may as well value your home lower then the price you are paying for the house.

Hope this helps.

LEP

You pay stamp duty on the actual purchase price, not the size of your mortgage.


I don't understand how you are getting a 250k mortgage on a property you are paying 230k for.....have you got the figures mixed up?

harvey115

I think we have misread the initial post.

I imagine the OP is planning to get a mortgage on the £230K purchase price, but not necessarily for the same amount. So below 100% mortgage.

TwitchyT

Brilliant so the stamp duty will be paid on the 230k (the purchase price).

harvey115 is correct, we wont be mortaging 230k (we have equity in our current house) but want to knock out a couple of walls in the new house to make the house more open plan so will want to borrow the amount it will cost to do this (an additional 20k) in the mortgage.

Sorry to confuse the issue.

digitalphase

I didn't realise you could borrow 20k more than the housing asking price anymore. I thought that sort of thing had been stamped out? Confused.

Stamp duty is paid on house price. So you'd have to pay 1% of the agreed price. I think that's £2,300 but maths isn't my strong point :rotfl:

Wantahouse_2

I think you've still confused matters.

If you agree a purchase price of £230k, and you agree a mortgage product for example of 90% LTV, the maximum they will lend you will be £207k?
Do you mean you are going to hold back money from the equity in your current house to do the building work rather than putting it towards the deposit in the new house?

StuC75

Most lenders will only lend upon valuations & remaining within the Loan To Value ratios...

What you need is to hold onto 20k of equity from your Sale.

Then buy at 230k, with the mortgage then being X percentage of that. This percentage depending upon the mortgage you want to secure and the remaining equity from the Sale less the 20k you need for improvements....

holly_hobby

SDLT is based on the purchase price of the property - in your case it will be 1% of 230k = £2,300 SDLT liability.

If the propery needs some remedial works, retain the cost of the works from the free equity released on the sale of your current home (following of course the provision of at least the minimum deposit reqd under the lenders/product criteria).

Hope this helps

Holly