Stamp Duty on New Build: Interesting Situation

MrLogical

Hi All,

We exchanged on a property pre-covid and are due to complete in a few months. We found out today that our stamp duty has dropped by £15k!

We have in our contract an agreed fixed amount that will be paid to us as a lump sum incentive WITH REGARDS to stamp duty. That is the way it is worded. 

Do you think we will still get this full amount and that the developer will not try and claw back an amount? There is nothing in the contract about this going down if we suddenly find ourselves needing to pay less. It is a cash incentive that we agreed during negotiations. The home asking price was not negotiated down as a result. 

Thoughts? Thanks in advance.

Alter_ego

I would guess the contract stands, provided you have actually exchanged.

MobileSaver

abbb053 said:

We have in our contract an agreed fixed amount that will be paid to us as a lump sum incentive WITH REGARDS to stamp duty. That is the way it is worded.

What is the exact wording of the contract clause regarding the "agreed fixed amount" and any other relevant clauses?

MrLogical

MobileSaver said:

abbb053 said:

We have in our contract an agreed fixed amount that will be paid to us as a lump sum incentive WITH REGARDS to stamp duty. That is the way it is worded.

What is the exact wording of the contract clause regarding the "agreed fixed amount" and any other relevant clauses?

‘Allowance in respect of stamp duty contribution’ under the heading Financial incentives. There isn’t really anything else about it. Was almost added in like an afterthought to a default template they use.

MrLogical

Alter_ego said:

I would guess the contract stands, provided you have actually exchanged.

Yes we have exchanged. Thanks.

OldMusicGuy

We have an agreed fixed amount in our contract abbb053 said:

Hi All,

We exchanged on a property pre-covid and are due to complete in a few months. We found out today that our stamp duty has dropped by £15k!

We have in our contract an agreed fixed amount that will be paid to us as a lump sum incentive WITH REGARDS to stamp duty. That is the way it is worded. 

Do you think we will still get this full amount and that the developer will not try and claw back an amount? There is nothing in the contract about this going down if we suddenly find ourselves needing to pay less. It is a cash incentive that we agreed during negotiations. The home asking price was not negotiated down as a result. 

Thoughts? Thanks in advance.

If you have it in writing that way, then the developer is bound to pay you a specific cash amount. The amount of actual stamp duty you pay is irrelevant.

monkeymarbles

I've asked for confirmation from our builder just to get the ball rolling. I've also had legal advice and they've said it's clear as day it's still an obligation to offer the incentive. 

MrLogical

monkeymarbles said:

I've asked for confirmation from our builder just to get the ball rolling. I've also had legal advice and they've said it's clear as day it's still an obligation to offer the incentive. 

Great! I’ve had similar advice from our solicitor. When do you complete? We still have a couple of months to go.

rmd076

sitabbb053 said:

Hi All,

We exchanged on a property pre-covid and are due to complete in a few months. We found out today that our stamp duty has dropped by £15k!

We have in our contract an agreed fixed amount that will be paid to us as a lump sum incentive WITH REGARDS to stamp duty. That is the way it is worded. 

Do you think we will still get this full amount and that the developer will not try and claw back an amount? There is nothing in the contract about this going down if we suddenly find ourselves needing to pay less. It is a cash incentive that we agreed during negotiations. The home asking price was not negotiated down as a result. 

Thoughts? Thanks in advance.

Hi, we are in a similar situation.  We exchanged just yesterday and are due to complete before the end of July on a new build purchase delayed during the lockdown. 
The developer is covering the stamp duty and the contract states, under incentives:

'If exchange of contracts takes place by (blank) the Seller will make an allowance to the Buyer of £xxx as a maximum contribution towards Stamp Duty Land Tax. The Buyer warrants that he has disclosed the allowance to his mortgage lender'.

I have this evening asked for advice from our solicitor so awaiting their response tomorrow.
I think the wording is clear that the allowance is due as a cash incentive but unsure whether the fact it is specifically stated as a contribution towards SDLT means anything?
Will report back any advice from the solicitor and subsequently developer.

MrLogical

rmd076 said:

sitabbb053 said:

Hi All,

We exchanged on a property pre-covid and are due to complete in a few months. We found out today that our stamp duty has dropped by £15k!

We have in our contract an agreed fixed amount that will be paid to us as a lump sum incentive WITH REGARDS to stamp duty. That is the way it is worded. 

Do you think we will still get this full amount and that the developer will not try and claw back an amount? There is nothing in the contract about this going down if we suddenly find ourselves needing to pay less. It is a cash incentive that we agreed during negotiations. The home asking price was not negotiated down as a result. 

Thoughts? Thanks in advance.

Hi, we are in a similar situation.  We exchanged just yesterday and are due to complete before the end of July on a new build purchase delayed during the lockdown. 
The developer is covering the stamp duty and the contract states, under incentives:

'If exchange of contracts takes place by (blank) the Seller will make an allowance to the Buyer of £xxx as a maximum contribution towards Stamp Duty Land Tax. The Buyer warrants that he has disclosed the allowance to his mortgage lender'.

I have this evening asked for advice from our solicitor so awaiting their response tomorrow.
I think the wording is clear that the allowance is due as a cash incentive but unsure whether the fact it is specifically stated as a contribution towards SDLT means anything?
Will report back any advice from the solicitor and subsequently developer.

Your contract appears to be worded quite differently to mine. I'd be a little concerned about the 'as a maximum' bit. My solicitor actually told me the lack of phrase like that in mine is why he believes I will get the full amount. You should definitely fight for it regardless. I'm sure you, like us, agreed the asking price knowing how much they would be contributing. If it was going to be less, then you would have rather paid that and agreed a lower asking price.

ankm

In a simiar situtation and completing in 2 days !  The thing is it would be unfair if they do not offer the incentive. When we negotiated we were always talked into the total discount we are getting inclusive of stamp duty . Also builder requested us to go with that option rather than reducing the property price. I have written to the solicitor as well. Lets  see what they say tomorrow.