Stamp duty incentive change

joee86

Hi,

My partner and I recently reserved a property with David Wilson, we were able to get them to agree to pay the Stamp Duty (8.5k) as an incentive. Due to the government announcement regarding stamp duty for first time buyers, the amount David Wilson will have to pay as an incentive is reduced to approx 3k. I didn’t think much of this, however, I just received a call from David Wilson, asking me for permission to change my mortgage application to show that they will be paying a reduced amount and given us a 5k contribution, which the lady said will be listed as an ‘allowance’. I said ‘great, so I can use this for extras’? She said, no, it cannot be used by us for anything and it will not lower the value of the property, it will just make it easier for the forms to be processed.

I wanted to ask whether you guys think I should insist that as they have agreed to use 8k as an incentive, I should be entitled to that? Or alternatively, should I just agree and not be greedy as I still have a 3k incentive?

joee86

I understand that we can always ask. However, we have signed the contract and everyone has agreed to the 8k incentive, albeit a stamp duty incentive. I wanted to know basically, am I in a strong position now and are they trying to pull a fast one? They have agreed to the incentive, they want me to agree to basically lie and say we have a 5k 'allowance' when we don't. Post the government change, we are still in the same position, but David Wilson is saving 5k.

joee86

I don't think they do need to say that. I think they have a form, where by it states they have provided 8k in incentives and they haven't, so in order not to change the overall application, they want me to agree to say that what makes up the 8k is changed, not the actual number.

davidmcn

Your mortgage application needs to reflect the actual price and incentives provided (and your solicitor will check that) - so I hope there's some misunderstanding and that they're not trying to encourage you to commit mortgage fraud.

As for whether you actually get the originally intended incentive - that's probably all still up for negotiation - obviously you know that they can afford to give it to you.

joee86

To update, I received an email from David Wilson that seems to be a general email sent to people in my situation. Am I not right in reading this as I should be allowed to spend the difference?

David Wilson Homes had previously offered you a ‘contribution towards your stamp duty’ which is now reduced or no longer payable following the Chancellor’s announcement.

I can confirm that this Stamp Duty reduction will still be passed on to you in one of the following ways:

1. In situations where we have agreed to pay a contribution to Stamp Duty and there is still a liability to pay then our contribution will be honoured. Any difference outstanding will be offered as an alternative added value benefit to the equivalent value.

2. In situations where we have agreed to pay a contribution to Stamp Duty and there is now no longer any liability to pay, then an alternative added value benefit to the equivalent value will be offered.

davidmcn

joee86 wrote: »

Am I not right in reading this as I should be allowed to spend the difference?

Yes, it's a bit clumsily worded but I think they just mean "we're giving everyone a discount equivalent to the standard rate of SDLT on the headline price".

mrginge

Sounds to me like they are just using it as an excuse to up their gross sale price and make it look like their houses are suddenly more expensive.

Slice of govt sponsored HPI cake anyone?

joee86

Thanks for your replies. I have emailed back to ask them to confirm but I cannot see how they can argue at this point. It seems quite clear, and surely they would have a hard time arguing that if it were to be taken further.

joee86

Another update, we will get the difference paid to us on completion, so can use that towards the flooring. Very happy.