Stamp duty on BTL with Discount

rahulbuyer

Hello All,

I'm tying to do my first investment by investing into a BTL property.
ITs a new build and the purchase price agreed with the builder is £265000/- with a £10k discount.

My Question is whether I have to pay stampduty on £265000/- or £275000/- ? I think it should be on £265000/- however my solicitor told me it would be calculated based on £275000/-

Does anyone have any experience of buying a new build with discount ?

Thanks

MyOnlyPost

Are there any terms to the discount? If you have just negotiated £10k off the asking price then I don't see how they can charge on anything other than £265k.

If however it is phrased as e.g. contribution towards deposit then £275k is the selling price

rahulbuyer

No its a discount. the price I will pay to builder is 265000. Thats all

davidmcn

It's based on the net amount. In the old days you'd pay it based on the "headline" price stated on the deed, but not now.

rahulbuyer

So you mean based on £265000/- ?

Thanks

MyOnlyPost

Yes should be.

Do you already own another property (residential not BTL as you were clear this is your 1st BTL)? If so have you been told you will pay 3% above the normal rate of stamp duty. If not have you been made aware that if you hold onto your BTL you will pay stamp duty at 3% above the normal rate on any future houses, including residential?

sparky130a

rahulbuyer wrote: »

No its a discount. the price I will pay to builder is 265000. Thats all

What is this "discount" you speak of?

It's an agreed selling price surely? Or what are you not telling us....?

marliepanda

If you are buying the property for 265k, then it is on 265k.

However, builders often offer incentives, which are not actually discounts, such as 'we'll sell you it for whats basically 265by gifting you 10k for the deposit' It keeps their sale prices intact (Look, we sold all these plots for 275k!) but gives you an incentive.

The second scenario is why people are doubting this is a typical 'discount' as your solicitor should know that if you buy for 265k, then youre buying for 265k.
The fact he is doubting it suggests its not as straightforward as you say.

If it IS as straightforward as you say, a simple haggle down to 265k, then get a new solicitor.