Builder contributing to stamp duty

bclark

So after my thread the other day about possibly building my own house it all came down to earth with a bump when the seller of the land withdrew it from sale.

We are now back to plan A and may be buying a new build near to us. As part of the deal that we have discussed the developer have offered to pay £5k towards stamp duty, which is nice. What I am wondering is how that actually works in practice?

Do they actually give me a cheque for that money so that I can pay the bill via the solicitor or does it just eventually end up as a dicsount on the house? If its the latter then does this affect the value of the house for mortgage purposes, i.e the value is £5k lower?

I am not looking to underdeclare a value or anything I just want to try and figure out the correct value that I can declare to the mortgage company so that I can figure out my LTV.

shortchanged_2

It's just another fiddle to make the sale price appear higher than it actually should be.
It looks good on their books and on the Land Registry figures for the 'actual' sold prices for their development.

Can you think why else it would be beneficial to them rather than just knocking £5K off the asking price?

bclark

Yeah I know why they are doing it, it's not out of the goodness of their heart.

My question was really about the practicalities, do I treat it as a discount off the price for mortgage purposes or is it a sum of money that they will pass to me on completion to pay the stamp duty? I really want to know if the mortgage company will consider the actual price of the house to be £5k lower because of the stamp duty contribution or not?

Thrugelmir

Any incentives will in essence be viewed as a discount.

As Shortchanged says. Developers like to register high prices at Land Registry. As disguises any deals that have been done.

jamesml

I think the way the lender treats it will vary by lender and also dependent on how significant it is in the context.

The best thing would be to just ask the builder. I would assume that you just pay £5k less than required to the solictior, who will then pay £5k less to the developer and settle your stamp duty payment after that.