New Build - Stamp Duty Incentive Negotiations

EmsLdn

Hello all,

Yesterday, we reserved a new build property with a developer. We were offered flooring and turf as incentives when we signed and paid our fee. We didn't ask for these, they were volunteered. We have since had a conversation with our solicitor who has said our stamp duty bill is likely to be over £8,000, which is more than we can afford.
Does anyone have experience of negotiating for splitting the stamp duty with a developer?
Even if they only paid 25%, it would be a huge help.

I look forward to hearing views on this sort of negotiation - our initial idea is to be as upfront and honest as possible. We would prefer not to lose the house - the mortgage is affordable and the location suits us well, but this tax is about to scupper our plans big time!

Thanks in advance! :beer:

da_rule

You can always ask, but if they say no you'll either have to foot the bill or walk away and lose any holding deposit you've paid.

EmsLdn

da_rule wrote: »

You can always ask, but if they say no you'll either have to foot the bill or walk away and lose any holding deposit you've paid.

Thanks for your reply.
We have resigned ourselves to the situation and realise we could lose the property if we don't raise the funds or successfully negotiate this additional incentive. We won't lose our holding deposit if we pull out before the end of the day tomorrow - we have a 48 hour cooling off period. Small mercies!

andyf1980

Our developer paid all of our stamp duty. Depends really on how well they!!!8217;re selling. The downside is our house is now in negative equity but as we!!!8217;re not planning to sell I don!!!8217;t mind too much.

AdrianC

EmsLdn wrote: »

We have since had a conversation with our solicitor who has said our stamp duty bill is likely to be over £8,000, which is more than we can afford.

This should not have come as a surprise to you.


If you're FTBs, then £8k of SDLT means you're paying about £460k+ for the property. If not FTBs, then £360k.

Does anyone have experience of negotiating for splitting the stamp duty with a developer?
Even if they only paid 25%, it would be a huge help.

Of course you can ask for what is, effectively, a £2k+ discount on the purchase...


And they can, of course, say no.

It all depends on how fast the properties are selling. If there's a queue of people waiting to take your place, then forget it. If they're starting to look at tumbleweed, then they'll leap.

jennhg88

Might be a bit late now, but no harm in asking first thing tomorrow?

kingstreet

if you need a mortgage, make sure you use a lender willing to accept builder cash incentives like this. If you don't you'll be back at square one with a lower purchase price and no funds to pay the SDLT.

BeckyAP

I second the above!
You need to be careful about how incentives are viewed by the mortgage lender - some only accept up to 1% or 5% of the total cost price.

Jane_B

Why would you put your name down for a new home without checking what the stamp duty would be? totally ignorant. You can ask, but don't expect it.

EmsLdn

Hello all,

To answer some of the posts - we checked the stamp duty fees and were told an amount which we didn't question. My husband is a first time buyer and had no reason to question the amount he was quoted - it matched the calculator he used in his calculations: https://www.moneyadviceservice.org.uk/en/tools/house-buying/stamp-duty-calculator If a professional tells you something, you tend to go with it unless you have reason to believe otherwise. It's great if you have experience of these things but many of us don't. Most of us are just muddling through, trying to get to a happy conclusion.
As an update and close to this matter, the developers have agreed to split the cost of stamp duty with us. If you were kind enough to offer advice and guidance on this matter, we thank you!

Cheers!

AdrianC

So what happened?

I'm guessing that while your other half is an FTB, you are not - and because you're married, you're treated as a single unit for SDLT, so while you were expecting to pay the FTB rate, you're being charged (correctly) the non-FTB rate...

Correct?

So when the "professional" asked if you were FTBs, and your husband said "I am", did you stay quiet, hoping you'd get away with it...?