Stamp duty paid by vendor...how?

timmyt

peckinpah wrote: »

We've recently purchased a property for £267,000 and the vendor has offered to pay 2% of the stamp duty, which seemed like a good deal. Being novices at the whole house buying thing (something we've only done once before), we asked the estate agent exactly how they pay the 2% but they didn't know and said our solicitors would understand the process.

Today I got a call from our solicitors asking me how the 2% stamp duty deal is going to work??? She said they can't give me the money as cash as I would have to pay tax on it and even if they did give me the money my mortgage lender would see it as us being given a sweetener to buy the property and may refuse to give us the mortgage. correct on the last bit, not on the tax bit

There seems to be a lot of properties on the market that have an offer of the stamp duty being paid so I would assume there must be some kind of secret process in place that I don't know about.

My solicitors suggested solution is to ask the vendor for a 2% reduction off the price and then we'll just sort out the stamp duty ourselves. bingo, dead right
Can any of you clever people shed some light on this please?

good luck OP. if the sellers give you it back whether in cash or pay your SDLT, it means you haven't really paid the price you said you were paying, so you'd need to tell your Lender - who may not care. But otherwise, sure the seller can give you back the money and you would only pay SDLT on what you paid the Seller, not what they give you back....but I'd just ask for a price reduction ....though that implies you and they were agreed on a higher price.

The seller's point is that they do not want you offering less than £250k

myhouse_2

Houses priced just above the stamp duty threshold tend to get dragged down under that level. To avoid this, the vendor offers to pay stamp duty.

<sebb>

The original post was made over 3 years ago, so I'm sure he's sorted it all by now...

highbury81

Hi,

Could I please ask for an up to date on this subject.

Looking to purchase a Garden Flat in London. We've managed to save 10% deposit & fees, however, we're short of the stamp duty (£8k). The house is on the market for £290k (crazy London prices!!!) so we've made an offer at £284k, with Stamp Duty to be covered by Seller. The estate agents have suggested this will be held by the solicitors till completion.

Is the legal & is this possible?

We're both desperate to get this garden flat but a little concerned what the current rules are.

Can you help?

Cheers

G

JQ.

Please start a new thread - It's incredibibly irritating for regular posters to have to spend 10 mins trawling through an old thread only to dicover a brand new question at the bottom.

In answer to your question - you need to speak to your mortgage company. In effect you are artificially increasing the purchase price to raise your LTV because you can't actually afford to buy the property. You need to tell them about this incentive as failure to do so would be mortgage fraud. Besides they'll find out eventually as your solicitor will have to tell them. Ultimately, you are asking for a vendor's gifted deposit. Very few mortgage companies like vendor gifted deposits, although I believe The Halifax will accept them.

Doozergirl

JQ. wrote: »

Please start a new thread - It's incredibibly irritating for regular posters to have to spend 10 mins trawling through an old thread only to dicover a brand new question at the bottom.

Please notice the newbie alert! First post, they might not even know how to start a new thread!

OP you can start a new thread, next time you need to, from the main board with all the thread titles on. There's a 'new thread' button on the left at both the top and the bottom.

JQ.

Doozergirl wrote: »

Please notice the newbie alert! First post, they might not even know how to start a new thread!

I did, hence my comment - if it had not been a newbie there would have been far more expletives. It is also why I then went on to actually answer the question.