How to pay for Stamp Duty?

Jlappy

Hi there,

I am looking to purchase my first property with a partner, the stumbling block seems to be the stamp duty and how to pay it.

We are looking to purchase a £390,000 house with a 10% deposit. We have a decision in principal and have pretty much already chosen the mortgage we will get.

We have enough left over to take care of all over fees and costs involved (surveyors, moving, solicitors etc...). However, the stamp duty works out to be £11,700. How do we go about paying that? We can't take it out as part of the mortgage (which i know is not great to do anyway) as we need 80% LTV.

We have no more money left over. How do we pay for the stamp duty? Will it have to be another loan on top?

Idiophreak

Jlappy wrote: »

We have no more money left over. How do we pay for the stamp duty? Will it have to be another loan on top?

Essentially, yeah. There are threads on here about some places accepting credit cards for it, other ways of getting the money etc...but mainly "having, or borrowing the money" seems the best advice.

We're just going through the same thing - had equity for deposit, but no savings for stamp duty (as keep spending all our money on holidays..woops!) - so we've had to extend our overdraft temporarily to cover it, then will pay it back over a couple of months.

If you're not able to pay the stamp duty relatively quickly, you might want to think about how affordable the house actually is...

Jlappy

Thanks for the reply. I cant believe how expensive it is and how they expect you to just pay it off. Other websites just mention that you can pay it over the phone with no hint of sarcasm!

We may have to look at other houses in less desirable areas or look at borrowing money from family or other sources.

somethingcorporate

It's hardly a surprise, most sensible people factor it into the price of buying a house. It's why you get such distortions in the prices around the stamp duty threshold since it makes a big difference to the cost of buying houses.

Personally, on this house I got the developer to pay the SD as part of the negotiations and I don't intend to be moving again. I couldn't bring myself to pay £15k+ on buying the next house up!

Idiophreak

Jlappy wrote: »

We may have to look at other houses in less desirable areas or look at borrowing money from family or other sources.

...but be aware that you'll have to declare the loan for affordability calculations on the mortgage application.

Technically, I believe you have to pay the stamp duty within 30 days of completion....but most solicitors seem to want it in their bank ahead of time...

kingstreet

The 30 day grace period only applies for cash purchases. If you need a mortgage there's a CML Handbook requirement (10.4) for solicitor to have cleared funds to cover all costs prior to completion.

Idiophreak

kingstreet wrote: »

The 30 day grace period only applies for cash purchases. If you need a mortgage there's a CML Handbook requirement (10.4) for solicitor to have cleared funds to cover all costs prior to completion.

:T:T:T

Isn't that what I said?

Mortgage_Mark_2

Hate to say it but if you can't afford the stamp duty on that house, then you can't afford the house...

Newstart2014

Hi


We had the same sort of thing on our house. We knew what it was going to cost and had planned to sell our car to cover the £22k Stamp Duty. We thought that we had 30 days, but when our solicitor sent us the final invoice (it was always apparently in progress but never sent the weeks before) the day before completion we felt sick. We both had to leave work at lunchtime to sort our heads out on what to do. We were lucky enough to have a friend be able to loan us the money until we sold the car a few weeks later.


But on receiving the Land Registry confirmation he sat on the money and sending off the Stamp Duty for just over 3wks. I guess adding to the interest pot.

ethank

You will not complete until they have the money, so you cannot exchange without knowing how you will pay it.