stamp duty question

bomber2

iam thinking of buying a house to rent out,the house is going to auction soon,there is a £6000 buyers premium on top of the sale price,the house is up for offers around 40k,if i won the auction for under 40k,lets say 39k then the 6k buyers premium,does this make it liable for stamp duty.

Surrey_EA

Purchases below £125,000 do not qualify for stamp duty.

Typhoon2000

Unless you own a property in which case it's £40000 after which you will pay 3% to £125000.

00ec25

the technical term for what figure SDLT is based on is the phrase: "chargeable consideration"

google: chargeable consideration and auction fees
note that what you appear to be describing are the purchaser's fees payable by you to the auction house. They are not fees incurred by the seller which you are paying on the seller's behalf. On the basis you are aware of the higher rate SDLT threshold of 40K it would appear that the answer is no, SDLT would be based on the 39K selling price. The "buyers premium" is not part of that, in just the same way that the buyer's conveyancing/legal costs are not part of the property's purchase "price".

However, be very careful that you ensure it is an "auction" and not a "sale by tender" because in that case the fee is part of the chargeable consideration.

http://www.thirskwinton.co.uk/2015/01/stamp-duty-guidance/
4. Auction Fees

There is a distinction to be drawn here. Fees payable by the purchaser to the auction house are not subject to SDLT. However, if you are then asked to pay the seller’s auction house fees, this element will be subject to SDLT.

bomber2

i own a property already so iam aware of the 3% on anything over 40k,its how the £6k buyers premium is taken into account is what i was wanting to know.the house i would pay £39.9k+£6k but if i had to go to £43/44k +£6k +£2k SD,then i would not.

AnotherJoe

Logically, which doesnt always work seems to me it comes down to how its invoiced.

Do they say "house was £39k and you owe us £6k for services" or "house is £45k" (and they siphon off £6k)

Given you pay the £6k whether you buy or not i suspect the former since otherwise there is no mechanism to charge you if you dont buy. Its really no different to paying an estate agent or the solicitor, its just an expense of buying the house.

But as I say thats logic, not the law, but I presume you would pay £39k to the seller for the house and £6k to the auction house as two transactions? Ask the auction house.

bomber2

i havent bought the house its going to auction for offers around £40k,i have viewed the house,iam willing to pay up to £45k maybe 46,hence i need to know,as a winning bid @41k will become £49k,winning bid @ 39k = 45K,

AnotherJoe

Perhaps I didn't explain myself. Ask the auction house if when you buy, they classify the cost of the house at £39k and also you separately pay them £6k, so the house sale is registered at £39k. That seems most likely to me just from normal auctions where you don't wrap the price of the item in with the premium.

00ec25

bomber2 wrote: »

i own a property already so iam aware of the 3% on anything over 40k,its how the £6k buyers premium is taken into account is what i was wanting to know.the house i would pay £39.9k+£6k but if i had to go to £43/44k +£6k +£2k SD,then i would not.

i have given you the info to answer your question, repeating the question won't make the answer any different.