Stamp Duty - please explain

gazter

Demetree wrote: »

My solicitor is insisting on receipts to the value of 10K, but the vendors solicitor has said they don't need the receipts as we just have to agree the price. Who is correct??

your solicitor is looking after your interests (and the lenders) while the vendors solicitor is looking after the vendors interests.

The vendor will not be at risk of paying stamp duty, you will be. The vendor solicitor doesnt really care what your risks are. Your solicitor does, thats what you are paying her for.

_Andy_

Why do so many people on a money saving forum want to pay thousands more for something than what it's worth?

gazter

_Andy_ wrote: »

Why do so many people on a money saving forum want to pay thousands more for something than what it's worth?

On the other hand, why are people so believing of surveyors? They dont have a magic wand.

The value of anything is just what someone else is prepared to pay. The original poster here though should be aware, that a seller selling for a price just over the stamp duty expects (or should have been told to expect) a sale price at the threshold. The surveyor is giving the poster ammunition to knock them down.

No one is going to pay them the price asked based on those two pieces of information.

AFK_Matrix

_Andy_ wrote: »

Why do so many people on a money saving forum want to pay thousands more for something than what it's worth?

Probably because they have their heart set on it, or are under pressure to close the deal. In the OPs case he has either fallen in love with the house and thinks there can't possibly be anything else as good out there, which isn't true. Or he is in panic mode as he will be homeless in 3 weeks, but as there are many ways to find a temporary place he really shouldn't be panicking and be clear headed about whether he wants to pay 10k over the asking price which imo is madness.

AFK_Matrix

gazter wrote: »

On the other hand, why are people so believing of surveyors? They dont have a magic wand.

That's all very well but the surveyor works for the lender and will take what the surveyor says as the price, doesn't matter what you think. So you'd have to apply to another lender and prey they first of all offer you a mortgage and then that their surveyor prices it higher, it could go lower! So not an easy situation.

ACG

I havnt read all of the replies but even if the valuation is £50k, if your paying over £125k then you have to pay stamp duty. What your estate agent is trying to do is fudge it all but your solicitor (rightly so) is having none of it by the looks of it.

You should be paying stamp duty on this.

As for the comments about paying more - that was your choice, you decided to proceed with the purchase when you could have pulled out. You could have also appealed the valuation - although i do not often see these get overturned it could have been an option.

tigsly

are you still at a negoitating stage (I'm assumign you are)

I would go back to your seller and say - 125 (or 124.99 ) or bust.

Say you are not willing to pay stamp duty on a property valued 5k below stamp duty rates.. say 125 meets in the middle..

I'd not pay stamp duty ontop of the 10k over the valuation to be honest.

twig1_2

Why not ask the vendor to pay the stamp duty this must happen a lot . That is not such a difference for them and gets the HMRC off your back as surely now they will be looking at this transaction with interest.
This is not so different from the people at the top of the chain paying towards the bottom of the chains deposit to keep the chain together.
This is what the estate agent and solicitors are being paid for.

tigsly wrote: »

are you still at a negoitating stage (I'm assumign you are)

I would go back to your seller and say - 125 (or 124.99 ) or bust.

Say you are not willing to pay stamp duty on a property valued 5k below stamp duty rates.. say 125 meets in the middle..

I'd not pay stamp duty ontop of the 10k over the valuation to be honest.

zzzLazyDaisy

twig1 wrote: »

Why not ask the vendor to pay the stamp duty this must happen a lot . That is not such a difference for them and gets the HMRC off your back as surely now they will be looking at this transaction with interest.
This is not so different from the people at the top of the chain paying towards the bottom of the chains deposit to keep the chain together.
This is what the estate agent and solicitors are being paid for.

Because this must be declared to the lender who will view it as a 'cash back' and reduce the agreed purchase price for lending purposes by the same amount.

This also used to be a common practice once upon a time, but that loophole was closed some time ago.

BazzaDP

zzzLazyDaisy wrote: »

Even this is risky.

Agreed. Didn't make that clear enough. Just meant price the chattel honestly. My last paragraph warning OP to be careful still applies when going down this road.

zzzLazyDaisy wrote: »

My advice is to agree a price below the SD threshold and either get the vendor to throw the chattels in, or tell the vendor you don't want them.

Yup. Cleanest way. And what I'd do in this situation.

Or, if OP is still convinced the valuation is low and still think it's worth £130k, and Vendor just won't negotiate and OP still wants to proceed then pay £130k all in and the Stamp Duty. They should take a moment to pause and think if it really is worth 20 grand more than a professional valuer thinks it is (even if professional valuer has an agenda to price low to reduce bank's risk). Nearly every house is unique so a valuation is just an estimate despite what some people on this board think. Only OP can decide what it's worth based on his/her circumstances. Then again, if you think differently than the majority, you're doing going to he disappointed if you ever try to sell later...