New stamp duty - builder incentive

ethank

Please update us with what your solicitor says. TBH if you are exchanging contracts on Monday, you would hope they would not want to mess about with the contract!

miss_sparkle

bclark wrote: »

When I bought last year we had stamp duty paid and the amount was quantified on the form and completion statement.

At the end of the day it's just a discount as they don't actually physically pay your stamp duty for you so they should detail an amount of money.

My builder is physically paying our stamp duty, they had already reduced the house by £10k and were paying £10500 stamp duty but I think that has come down to £7500 now so they will get the saving, on our reservation form it just states 'stamp duty paid' in the incentives. They haven't given the extra discount on the house

kingstreet

The builder doesn't pay your stamp duty.

It reduces the amount of purchase funds its solicitor requests from yours at completion, then your solicitor pays HMRC.

It cannot reduce the incentives set out on the reservation without your prior agreement.

miss_sparkle

kingstreet wrote: »

The builder doesn't pay your stamp duty.

It reduces the amount of purchase funds its solicitor requests from yours at completion, then your solicitor pays HMRC.

It cannot reduce the incentives set out on the reservation without your prior agreement.

Oh right I didn't know that, so what happens on completion, my house is £349950 & using help to buy, they just ask for the price minus the stamp duty & the extra goes to pay my stamp duty?
So in theory I would of been better off getting another £7500 off the price rather than a stamp duty incentive and mortgaging the higher amount.
Not that it makes any difference as we don't have the extra for the stamp duty anyway & suppose it's the same difference taking the full amount & paying out the stamp or taking the amount less the stamp duty.

Lorablue

kingstreet wrote: »

The builder doesn't pay your stamp duty.

It reduces the amount of purchase funds its solicitor requests from yours at completion, then your solicitor pays HMRC.

It cannot reduce the incentives set out on the reservation without your prior agreement.

I am really confused: if we don't pay the stamp duty and neither does the builder, who does?

Lorablue

ethank wrote: »

Please update us with what your solicitor says. TBH if you are exchanging contracts on Monday, you would hope they would not want to mess about with the contract!

We are still waiting for the solicitor to confirm and really hope they would answer tomorrow on the exchange day!

Thrugelmir

Lorablue wrote: »

I am really confused: if we don't pay the stamp duty and neither does the builder, who does?

Rather than remit the full purchase price paid to the developer. The solicitor holds back sufficient funds to pay the stamp duty. The solicitor then pays the stamp duty in the normal way.

Lorablue

Ok, in this case developer wins too because the amount of the stamp duty is less than the agreed allowance so the solicitor will retain less?

Lorablue

Another question from complete novice please: who chooses stamp duty regime (old or new)? Is it us or it is agreed with the builder?

Thrugelmir

Lorablue wrote: »

Ok, in this case developer wins too because the amount of the stamp duty is less than the agreed allowance so the solicitor will retain less?

If stamp duty increased then they would lose out. So the developer carries the commercial risk. You've not lost anything. Totally the reverse. As a lower rate of stamp duty may well mean that you can sell the property for more at a later date.