Stamp Duty - based on purchase price or true value?

superdudeo

I'd love clarification on whether stamp duty is paid on the price you pay or the valuation of a property?

I'm buying a home from my mum and this is important to know.

My broker says true value and three solicitors have said purchase price.

Many thanks

mrginge

It's based on the consideration (I.e the purchase price)

superdudeo

Thank you.

Is it not questionable that in cases like mine, (where a family member is selling their property to a family member) that they will sell under its valuation to avoid higher stamp duty? I find it odd that this would be allowed.

mrginge

superdudeo wrote: »

Thank you.

Is it not questionable that in cases like mine, (where a family member is selling their property to a family member) that they will sell under its valuation to avoid higher stamp duty? I find it odd that this would be allowed.

Ok, it's a slightly different case, but the general principle applies...

you go and buy a TV and it's in a sale so has been reduced in price from £1000 to £800.

Do you pay VAT on £1000?

gingercordial

superdudeo wrote: »

Thank you.

Is it not questionable that in cases like mine, (where a family member is selling their property to a family member) that they will sell under its valuation to avoid higher stamp duty? I find it odd that this would be allowed.

Not for SDLT.

However if this isn't your mother's home she may be liable to CGT and that is based on market value for sales between connected parties.