Stamp duty was one of our incentives from the developer...

harrys_dad

westernpromise wrote: »

It's being so cheerful that keeps you going.

I am exceedingly cheerful, and have a wonderful life. Part of that is being concerned about others less fortunate, and doing my best to help them.

ACCA

I haven't exchanged yet, but very close to the date (i.e. in a week or so) and currently in the process of the paperwork review.

I'm with Barratt and purchase with HTB. The developer offered the SDLT incentive for its customers, which was a very kind saving of ~£10k. Obviously with the new budget approved earlier this week, the cost of SDLT will be sliced by nearly half.

Given that i didn't exchange yet, i got in touch with the sales team and ask what's their approach to the regulation and whether there are any incentives to reduce the purchase price. The response i received is: "With the new stamp duty rates this does not really affect you as Stamp duty is abolished on a purchase price up to £300,000 but a reduced rate is now applicable for you and we are already giving you a contribution to stamp duty of £10,250 so you are better off that before the budget.".

Could anyone advice what the response actually means, i.e. how i am better off (assuming this wasn't my cost at all)?

And, what do you think would be the best ways out of this situation?

Thrugelmir

ACCA wrote: »

I haven't exchanged yet, but very close to the date (i.e. in a week or so) and currently in the process of the paperwork review.

I'm with Barratt and purchase with HTB. The developer offered the SDLT incentive for its customers, which was a very kind saving of ~£10k. Obviously with the new budget approved earlier this week, the cost of SDLT will be sliced by nearly half.

Given that i didn't exchange yet, i got in touch with the sales team and ask what's their approach to the regulation and whether there are any incentives to reduce the purchase price. The response i received is: "With the new stamp duty rates this does not really affect you as Stamp duty is abolished on a purchase price up to £300,000 but a reduced rate is now applicable for you and we are already giving you a contribution to stamp duty of £10,250 so you are better off that before the budget.".

Could anyone advice what the response actually means, i.e. how i am better off (assuming this wasn't my cost at all)?

And, what do you think would be the best ways out of this situation?

Were Barretts offering to pay all of your Stamp Duty or a contribution to?

dhokes

kingstreet wrote: »

A note of caution.

Some lenders accept builders paying SDLT as a cash incentive, but don't accept cashbacks.

If you try to barter your SDLT payment into another cash incentive, you may end up having to apply to a new lender for a mortgage.

As an example, we have a Santander HTB case where SDLT was permitted, but a cashback isn't, so it looks like we will have to do the mortgage all over again, from scratch.

Do Halifax accept cashbacks?

I'm in the process of buying a new build and the seller agreed to pay stamp duty. Since I haven't exchanged contracts yet, I'm planning to negotiate some other form of incentive from the seller.

Marvel1

dhokes wrote: »

Do Halifax accept cashbacks?

Ask them?
........

ACCA

Thrugelmir wrote: »

Were Barretts offering to pay all of your Stamp Duty or a contribution to?

Thanks for your response; the leasehold agreement says the following:

The Purchase Price being XXX XXXX Pounds (£XXX,XXX.00)
Less the contribution(s) from the seller to the buyer as detailed below
Contribution towards SDLT £10,XXX.00

00ec25

ACCA wrote: »

Thanks for your response; the leasehold agreement says the following:

The Purchase Price being XXX XXXX Pounds (£XXX,XXX.00)
Less the contribution(s) from the seller to the buyer as detailed below
Contribution towards SDLT £10,XXX.00

so on paper you appear to have a defined sum of money which would be paid to you.

The problem is the developer will not want to convert that into a straightforward discount against the actual property price as that means the property will then be listed as having sold at the discounted price on the land registry records - thereby impacting the developer's future asking prices.

you will need to have an argument with the developer over the precise meaning of their "offer". Given you have not yet exchanged contracts, your negotiating position is relatively weak since the developer now knows you will not have to pay £1 of tax and thus why should he give you a discount off the actual asking price as you will still be paying the same price as you "agreed" in the offer: property price X plus SDLT Y minus SDLT contribution Z Remove Y and Z and you are still left with X as the amount payable..

ACCA

00ec25 wrote: »

so on paper you appear to have a defined sum of money which would be paid to you.

The problem is the developer will not want to convert that into a straightforward discount against the actual property price as that means the property will then be listed as having sold at the discounted price on the land registry records - thereby impacting the developer's future asking prices.

you will need to have an argument with the developer over the precise meaning of their "offer". Given you have not yet exchanged contracts, your negotiating position is relatively weak since the developer now knows you will not have to pay £1 of tax and thus why should he give you a discount off the actual asking price as you will still be paying the same price as you "agreed" in the offer: property price X plus SDLT Y minus SDLT contribution Z Remove Y and Z and you are still left with X as the amount payable..

Thanks a lot for your detailed note. It all makes perfect sense, in particular "the property will be listed as sold at discounted price". Also, agree on the point that that it's very unlikely that the developer would want give any other incentives knowing that i benefit from SD exemption.

It's just from conceptual perspective, say - i was originally expected to get a benefit of £10k (obviously this was not the main reason i considered this purchase, but still) i.e. developer's cost. Due to the changes, the developer's cost now went down and i was curious whether there might be any options of recovering this entirely or partially.

I am going to try my luck and see if i can get the developer pay my solicitors or extras.

Mutton_Geoff

ScorpiondeRooftrouser wrote: »

You are aware that is the Daily Mash, right? Bit disingenuous to include that link without comment if you are.

I am fully aware the Daily Mash is a satirical website and so should others be at first read of any of their articles!

AnotherJoe

ACCA wrote: »

Thanks for your response; the leasehold agreement says the following:

The Purchase Price being XXX XXXX Pounds (£XXX,XXX.00)
Less the contribution(s) from the seller to the buyer as detailed below
Contribution towards SDLT £10,XXX.00

Leasehold ? I’d be more worried about that than SDLT.