When do I need to prove I have my stamp duty buying off-plan

Gismmo

I have currently reserved a new flat in London. We are looking at getting a mortgage setup with the help to buy scheme we currently have the 5% deposit to do this. We are buying the property off plan and the completion date is not for another 7-8 months. During this time we were hoping to save up our additional funds to pay our stamp duty.

1. Is this possible to do?
2. When do we need to prove we have the funds available to pay the stamp duty?
3. Roughly when we would have to pay the stamp duty?

Hedgehog99

You pay the stamp duty to your solicitor in time for the funds to clear in time for them to pay it on completion.

I think technically you can pay it within a certain time after completion, but you might as well pay it at the same time as you pay your solicitor everything else (their fees, EA fees & all the other fees that seem to crawl out of the woodwork at the whiff of a home-buyer) so as not to have to incur yet more solicitor time/fees etc.

I didn't have to prove I had the funds until the payment was due.

da_rule

Stamp duty has to be paid within 30 days of completion or you incur penalities and interest.

In practice, most (if not all) solicitors will want the money ahead of completion so that they can make sure that deadline is complied with so that you aren't charged extra.

When I had to provide proof of funds for my deposit, I also had to provide proof of funds for the stamp duty and other costs. However as you have so long to go then it would seem logical that a coherent plan for how you will save the money should also suffice.

SuboJvR

My solicitor asked where the rest of our money was coming from for purchase eg not deposit, not mortgage, when we first instructed them. They wanted a bank statement showing some evidence of savings.

However we have continued to save through these months as a few extra costs have come along (some of our own choosing e.g. Slightly more expensive flooring) so if they asked again now the balance would look healthier. They may just wish to see some recent evidence of savings to see you can put the money away.

00ec25

you pay SDLT on completion, so when buying off plan you can have a long delay between exchange/reservation and actually paying since you are obviously waiting for the build to finish

as it appears you will need a mortgage ignore comments about 30 days to pay. That only applies if you are a cash (ie non mortgage) buyer.

The Council of Mortgage Lenders requires solicitors to have the funds in their client account to pay the SDLT before the lender will release the mortgage funds to pay on completion. Therefore, your solicitor will insist he has the funds before you complete - how much time before depends on the solicitor could be 1 day allowing for faster banking, could be 1 week. You won't know until they tell you, as above for example, it could be on instruction or on contract exchange. bear in mind the solicitor keeps any interest earned on the client money account (unless your contract with them allows you to ask for it) so likes to have the cash for as long as possible.

Rambosmum

We haven't needed to evidence we have any money at all (other than income for the mortgage). We exchange next week!