Who should inform you about stamp duty?

Hannahkah19

Hi,


We are in the process of buying a new build home. We went to the sales office and picked the house/plot we liked and then we were told before we could reserve we had to use their financial advisors to check our affordability. Once we had that signed off and were preapproved for a mortgage we could then reserve the plot. We did as instructed and went through all the necessary details with the financial advisor, he asked about deposit funds and help to buy scheme and then proceeded to look for a mortgage for us. He confirmed our preapproval for a mortgage and affordability and informed the sales office you were then extremely quick to call us to get the reservation fee paid over the phone. Two weeks later when instructing our solicitors we are informed that there is also a charge of £4500 for the land tax. When I queried this the solicitor said this should have been discussed when purchasing the property with the financial advisor. I queried this with the sales office who also agreed it was the FA responsibility to tell us about this when going through affordability. This has taken a huge amount out of our budget and knowing of this would have directly impacted which house and plot we picked. After following the advice of the sales office I raised a complaint with the FA but they have now come back to us and said it's not their responsibility as they are only mortgage advisors (despite their website saying they are financial advisors). Who is responsible for informing us of this extra cost. My view point is you wouldn't accept buying a car for a certain price and then when you go and pay they've added on the tax. That is all disclosed as the final price or at the very least caveated with plus VAT.

SmashedAvacado

You are responsible for knowing about this
Unless you have agreed that someone else would be
Which from what you have posted, you havent

Hannahkah19

So what do you use a financial advisor for then? Surely you use them because they are qualified in knowing all the costs and pitfalls associated with purchasing a property. If I knew all this information myself I wouldn't have any need to pay for an advisor would I?

aries_163

As discussed you are responsible for knowing about SDLT I’m afraid. Have you done any research on buying a house? It’s a well established cost when buying. And the developer/ FA isn’t responsible for telling you as it’s not money they pocket. This is a ‘tax’ paid to the government, not the developer.
It’s like solicitors costs, the developer won’t have included them in the house price but it is a cost you will need to pay for.
Unfortunately I think you are going to have to chalk this up to inexperience on your part. I’d suggest doing some googling on the house buying process so you don’t get any other unexpected surprises.

SmashedAvacado

You paid them to find you a mortgage.

aries_163

To answer you’d 2nd post, you use the FA/ MA to find you the best mortgage deal.

Hannahkah19

But the financial adviser goes through your affordability of purchasing a property, the fees and costs associated with it etc and then options for funding like a mortgage no? If no, why did we have to speak to one to get our affordability signed off before we were allowed to pay to reserve the plot. I get it's to stop time wasters but the only person losing money would be us. How can affordability to purchase a property be signed off if not all the cost are disclosed?

Hannahkah19

aries_163 wrote: »

To answer you’d 2nd post, you use the FA/ MA to find you the best mortgage deal.

We didn't choose the FA. We were told we had to use them to have our affordability to purchase the property qualified first. The mortgage application did not have to go through them.

Oxid8uk

Hannahkah19 wrote: »

How can affordability to purchase a property be signed off if not all the cost are disclosed?

Because when they talk about affordability they mean can you afford the mortgage and associated costs of home ownership on a monthly basis. The initial costs of buying the house (i.e. solicitor costs, stamp duty etc) are not included.

aries_163

Developers get you to be ‘pre-screened’ for affordability just to make sure your general income etc can afford the size of mortgage you are applying for. Like you said it is purely to weed out people who will never in a million years get a mortgage approved and so the sales office know not to chase up.
Stamp duty is paid on completion so has nothing to do with how large a monthly mortgage payment you can afford.
I guess in a perfect world they would have mentioned it to you, but paying SDLT is such a well-known intrinsic part of buying a house they probably (rightly or wrongly) assumed you knew about this cost.
I’m assuming that as you didn’t know about SDLT, you are first time buyers? And based on a SDLT figure of £4500 you’ve been quoted, the purchase price is £290k?
I’d double check that your solicitors know you are FTBs (if you infact are), as if you have never owned a property before then you should be able to benefit for the FTB stamp duty relief which would reduce the amount you have to pay to £0 I think.

Skibunny40

Did you have to pay for this affordability test?
I must admit, I would have expected a FA to talk me through ALL the costs associated with buying a house, inc. stuff like taxes and fees - did they mention the cost of solicitors fees etc?