Stamp Duty paid by builder

monkeymarbles

grefalo said:

Just spoken to our developer. They say that as we’ve already exchanged, there’s nothing they can do. We get nothing. They pay nothing. But their bank balance shows an unexpected 15k at the end of all this. Lovely.

Who is your developer? Mine has confirmed today they will honour it and we've exchanged. I'm not going to mention who it is until all sorted legally but it's a bigger one. 

yvmilne

Our developer have not been helpful at all, implied that we may need to re-apply for our mortgage if they change the incentive (not true as spoke to our broker before calling them) and also implied they can't hold the house!! Not happy but not sure where to go from here?

davidmcn

grefalo said:

San_Jose said:

I'd be inclined to seek legal advice. What has your solicitor said?

To negotiate with the developer directly.

Why is any "negotiation" necessary if the contract states the amount of discount they're giving you?

MrLogical

grefalo said:

Just spoken to our developer. They say that as we’ve already exchanged, there’s nothing they can do. We get nothing. They pay nothing. But their bank balance shows an unexpected 15k at the end of all this. Lovely.

So your agreement was that they pay the stamp duty? Ours is quite different. We get cash. We pay the stamp duty ourselves. So our agreement states a cash incentive. Our mortgage docs from the bank say that we will get a cash incentive. The only mention of stamp duty is that was given to us so we can use it towards the payment.

ankm

abbb053 said:

Ankm, please keep us updated but I agree with everyone else here. If they have agreed to give you money, it shouldn’t matter how you choose to spend it and what the government has done with stamp duty. If they have said they will pay it for you and that the amount is linked to how much you will actually pay, it actually says this, then they would have taken the risk of paying more if it had gone up so makes sense from them to drop it. The wording is very important here. Whilst it may seem many of us are in a similar position, I think we will find people get differing results here.

Hey All - I wanted to update. So the builder has accepted to give me the allowance amount which was stated as stamp duty allowance. It was bit of a U turn as in the morning they were saying just the opposite. Anyways glad I am getting the same allowance I negotiated for.

grefalo

U-turn here as well! Developer just called to confirm they’ll transfer the money as promised to our solicitor who will then transfer to me. 

kellywelly123

davidmcn said:

zazu94 said:

Hi guys! Would like some help with this too - we had negotiated a £5k stamp duty incentive and the current stamp duty is below this. We had signed the contracts and were waiting for the ATE from help to buy. Our solicitor is now insisting that paperwork will have to be changed to reflect "that the tax incentive is now lower". Apparently if we do that we will also have to let the bank know. Im pushing for the £5000 incentive to remain and the balance be paid to us as cash to avoid delays (im currently renting and the new build is almost complete so any delays impacts when I can give notice and leave.

Our solicitor is however insisting that the tax incentive is changing and hence it all has to be resubmitted to Help to Buy. any thoughts as she is refusing to confirm until she gets "confirmation from Inland Revenue"

From what I've read here doesn't sound like it matters if the tax incentive> actual stamp duty?

Why is your solicitor insisting on it rather than fighting your corner? This isn't by any chance a solicitor "recommended" to you by the developer, is it?

(and it hasn't been the "Inland Revenue" since 2005 but maybe news travels slowly...)

We are in a similar position. We have exchanged contracts and it states “the contract confirms we will be having an incentive of £11,250 - stamp duty contribution. However when I contacted the solicitor (recommended by the developer) they said “ You will need to speak to the developer as they were giving you a stamp duty allowance so technically as it is no longer payable they may withdraw the allowance.”
I am fearful that the solicitor will be side with the developer as we have seen a bit of this already when disputing something else. 

MrLogical

ankm said:

abbb053 said:

Ankm, please keep us updated but I agree with everyone else here. If they have agreed to give you money, it shouldn’t matter how you choose to spend it and what the government has done with stamp duty. If they have said they will pay it for you and that the amount is linked to how much you will actually pay, it actually says this, then they would have taken the risk of paying more if it had gone up so makes sense from them to drop it. The wording is very important here. Whilst it may seem many of us are in a similar position, I think we will find people get differing results here.

Hey All - I wanted to update. So the builder has accepted to give me the allowance amount which was stated as stamp duty allowance. It was bit of a U turn as in the morning they were saying just the opposite. Anyways glad I am getting the same allowance I negotiated for.

Thank you for replying to the group. It’s fantastic to see that the right precedent is being set by your developers for all to follow!

kellywelly123

I am in the same situation. I exchanged contracts in February and due to complete Sept/Oct. We don’t have a copy of the contract, it wasn’t provided at the time by the solicitor (I have now requested a copy). Instead the solicitor gave us a contract report and it states “The contract also confirms that we will be having an incentive of £11,250 - stamp duty contribution”. I must admit I am a little worried that the solicitor will side with the developer and try to get out of it. During the start they seemed to focus on what the developer wanted rather than me! In hindsight we should have gone with a different solicitor. I contacted them the other day after the announcement and they said “You will need to speak to the developer as they were giving you a stamp duty allowance so technically as it is no longer payable they may withdraw the allowance”. We my solicitor surely they should have contacted them! I have since emailed the developer but not heard back. Would be nice to see what they say. If they refuse I will be seeking legal advice. 

Grumpy_chap

As I understand it, SDLT is the responsibility of the property purchaser to pay and it is a liability on the purchaser, so the only way someone else (developer) could pay the tax would be if they paid the money to the purchaser and the purchaser then pays the tax.  If this was not the case, the purchaser would be exposed to the 'other party' (builder) saying "I've got this" and then not doing so.  It is just a marketing gimmick to say "stamp duty paid" or whatever other discount they choose to construct and include in the price.

Glad that the builder in this case has done the right thing and hope that will become the precedent.