Paying Vendor's fees / moving costs

wizzpopp

Hello,

I've just put an offer in on a house. It's on a stamp duty threshold and vendor is saying they can accept if we can help with their fees / movings costs.

Estate agent says this is a grey area but does happen.

Does anyone have experience with this?

I know on location location last night something similar went on where the buyers paid for the moving costs of the vendors.

We love the house, just don't want to get done if it's illegal.

FireWyrm

Bwahh ahahahaha.....

In this market!? Are they serious. Tell them to take a hike. Either they want to sell the house or they dont.

Honestly!

I'd leave them to stew for a few days before you reply too and then decline. Walk away. Sounds like you're in for a rough ride anyway so they had better get a reality check now.

bubblegum1985

Its not illegal, just part of the negotiation.

The vendors can ask for anything they want, it might be that they are willing to take the lower offer in return for that assistance, similarly you might be in a position where you cant get a bigger mortgage so it would help you out to get a lower price but still pay for those costs.

Sit down and work out how much they want as a contribution and if its worth it or if its better to offer slightly more for the house, for example, they might accept £2500 more on the house and no help with the fees, but it might cost you £5000 to keep your lower offer on the house and pay for the fees. Which is better for you?

Or say no and leave it at that if you are not happy with the extras they are asking.

wizzpopp

Thanks for the reply.

It's in London, houses are on the market for 3-4 days before they disappear at this price so there is limited bargaining to be done.

We can't offer any higher on the house because we'd have to pay an extra 2% in stamp duty so our budget is capped at £250k.

They are asking for £1500 for the white goods and £3500 for fees and moving costs. THis seems pretty reasonable to us.

hazyjo

They have to sell them at second hand prices. £1500 does not seem reasonable to me. I would not be paying their fees and moving costs either. Up to you though! Do you have the cash to pay an extra £5k?

Jx

mrginge

If you accept this plan and get investigated by hmrc, who do you think could end up in the **** ?
Here's a clue.
Its not the vendor or the estate agent.

Beckyy

The white goods figure seems a little high, sounds like they're just trying to get as much as they can because they can't go over the stamp duty theshold.

I wouldn't entertain the idea, but if you would like to proceed then I would try and reduce the figure as much as possible. Don't let your heart rule your cheque book, there will be other houses.

martinsurrey

If you pay for the fees and/or an inflated amount for white goods, and then put this on the return to HMRC for stamp duty, it is fraud, and if caught you will have to pay the stamp duty and a fine.

Paying for white good (fixtures and fittings) is allowed but only at market price (and second hand is low).

You can pay for thier fees, but that is taxable consideration, and should be added to the 'house price' to get the price for stamp duty purposes, and, this will push you into the 3% band.

DONT RISK IT.

Ohh and its not a gray area, what you propose is fraud, black and white.

what you can pay for F&F is a gray area, but paying for thier fees is black and white.

Ivana_Tinkle

As mrginge says, you are the only person with anything to lose in this arrangement. You might well get away with it but, if HMRC investigate - and I've got no experience of this, but plenty of people on here seem to think they do investigate sales on the threshold quite often - then it's not remotely a "grey area" and you'd have to pay the extra stamp duty.

Also, you'd have to persuade your solicitor and the vendor's solicitor to participate in the fraud, which IME they'd be unlikely to do, but this unwillingness might not come to light until you're a fair way on with the conveyancing process. So then you're a few weeks in, having paid for surveys and searches and faced with the deal falling apart.

(BTW I'm not calling it "fraud" to be judgemental. I think the stamp duty system is barking and I don't blame anyone for trying to get around it, but it is fraud and I think there's a fair chance that you'd get caught.)

EDIT: massive x-post with martinsurrey. Great minds!

Yorkie1

I agree with the others. You will have to declare all of this to your solicitor, and he to his solicitor. The solicitors will not be party to tax evasion.

£1500 for white goods is laughably high.

HMRC isn't stupid and looks very closely at transactions on a stamp duty threshold.

wizzpopp

Came to a better deal in the end. No nonsense. we're paying £2000 for chattels and its being drawn up by a solicitor so all legit. There's loads of appliances and a massive steel lock up in the garden which I don't think is fixed to the floor so should be all good. Guess we'll know more when we see the full list of items.