Stamp Duty paid by builder

jon81uk

yvmilne said:

Hi can someone please explain how a cashback incentive would work?  I have just had the below reply from my builder 

"Has it been explained to you that when a lender says cash back you don’t actually physically get cashback?" followed by this from the solicitor 

"I will draft you statements to show how the allowance works against the purchase price that is the easiest way to show for you" but that she can't do this until tomorrow?

As far as I know it just appears on the completion statement by the solicitor.
So something like for example
House price £500,000 (example price)
Deposit £-100,000
mortgage -400,000
stamp duty £0
solicitors fees £1500
incentive -£15000
Money owed to the buyer £13,500

So in that example you would get the money back via the solicitor once all fees have been paid.

DotNetter

I'm in the same situation.  Due to exchange shortly with "stamp duty paid £3995" stated in the contract.
The builder is saying they will honour it and it will simply come off of the final balance.
However, I am buying the house using HTB and my concern is that I will exchange and that this situation will cause either HTB or my main lender (Nationwide) to refuse - leaving me in a sticky situation.  Anyone got any ideas how this should work in terms of HTB especially?
In total, I negotiated £12K discount which I split as:-

• £500 towards legal fess
• £7K for options (flooring etc)
• £4K as stamp duty
• £500 remaining as a discount off of the original asking price.

My HTB application and mortgage were all based on this and so I am worried that exchanging contracts and then effectively receiving the stamp duty portion as a cash payment will invalidate the terms or also leave me open to having to pay tax on the £4K (nobody has mentioned this yet).
Thanks.

yvmilne

Check with your broker - they are saying they don't need new CML forms, and although our lender doesn't usually allow cash back they are due to what's happening.

yvmilne

Thanks jon81UK this is what I thought - in which case we would physically get cash back at the end?  So what is he on about?

davidmcn

yvmilne said:

Thanks jon81UK this is what I thought - in which case we would physically get cash back at the end?  So what is he on about?

Like I said, no you don't - it just gets taken account of in your completion statement. So if it's a £250k price and a £10k incentive, you pay £240k via your solicitor. You don't need to find the £10k and wait for it to come back to you.

jon81uk

davidmcn said:

yvmilne said:

Thanks jon81UK this is what I thought - in which case we would physically get cash back at the end?  So what is he on about?

Like I said, no you don't - it just gets taken account of in your completion statement. So if it's a £250k price and a £10k incentive, you pay £240k via your solicitor. You don't need to find the £10k and wait for it to come back to you.

Generally though the deposit is paid at exchange, so you do need to find the money upfront and then you get it back at completion?

We are getting an incentive from our builder that was never linked to stamp duty, but our solicitor already told us we would get some money back at completion as the incentives were greater than the money owed for stamp duty, now we will get more back as stamp duty is down to zero.

DotNetter

jon81uk said:

davidmcn said:

yvmilne said:

Thanks jon81UK this is what I thought - in which case we would physically get cash back at the end?  So what is he on about?

Like I said, no you don't - it just gets taken account of in your completion statement. So if it's a £250k price and a £10k incentive, you pay £240k via your solicitor. You don't need to find the £10k and wait for it to come back to you.

Generally though the deposit is paid at exchange, so you do need to find the money upfront and then you get it back at completion?

We are getting an incentive from our builder that was never linked to stamp duty, but our solicitor already told us we would get some money back at completion as the incentives were greater than the money owed for stamp duty, now we will get more back as stamp duty is down to zero.

This is what concerns me.
My Deposit is 5% which equates to £14K - this is due on exchange of contracts.
At completion, there may well be a surplus of around £2K which would then come back to me - does this man that I've contributed only £12K which is < than the 5% I HAVE to put towards the purchase to qualify for the HTB scheme?

jon81uk

DotNetter said:

jon81uk said:

davidmcn said:

yvmilne said:

Thanks jon81UK this is what I thought - in which case we would physically get cash back at the end?  So what is he on about?

Like I said, no you don't - it just gets taken account of in your completion statement. So if it's a £250k price and a £10k incentive, you pay £240k via your solicitor. You don't need to find the £10k and wait for it to come back to you.

Generally though the deposit is paid at exchange, so you do need to find the money upfront and then you get it back at completion?

We are getting an incentive from our builder that was never linked to stamp duty, but our solicitor already told us we would get some money back at completion as the incentives were greater than the money owed for stamp duty, now we will get more back as stamp duty is down to zero.

This is what concerns me.
My Deposit is 5% which equates to £14K - this is due on exchange of contracts.
At completion, there may well be a surplus of around £2K which would then come back to me - does this man that I've contributed only £12K which is < than the 5% I HAVE to put towards the purchase to qualify for the HTB scheme?

I assume your incentive is listed on the HTB and mortgage confirmations? Therefore you shouldn’t need to worry as they are aware. 

dannymwigan1

tinytiddles said:

MrLogical said:

So we now have Bellway and Redrow agreeing to honour their promise which is fantastic. Any other developers we can add to the list which will help people with these discussions?

We are buying with Taylor Wimpey and they called us (without prompting) to offer the stamp duty contribution as a cash deposit contribution instead. 

Must admit, we were pleasantly surprised at their stance as we expected to be told to jog on and lose the incentive. 

I am awaiting a reply from wain homes about my stamp duty incentive, has anyone else got any more Information on wain homes’s standing on the matter?
thanks 

biscotti

Update from Bellway: they are transferring the incentives to the extras we have chosen. We had an options meeting last month and decided to get a few bits of upgrades and the flooring for the wet areas (kitchen, cloakroom and bathroom). They haven’t taken the payment yet and they offered that we can use the stamp duty allowance for this. So yey! We are happy.