Stamp Duty on New Build: Interesting Situation

rmd076

abbb053 said:

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.

You are right - I am a little concerned about that although it’s does state the £ amount ‘as a maximum contribution’, rather than, say, ‘up to a maximum of £’!  
And yes, we did negotiate on the basis that the developer was contributing an overall amount of incentives, including the SDLT cash.  Let’s see what happens...
Thanks

rmd076

ankm said:

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.

Good luck.

ankm

Exactly in the same situation i.e. exchanged and not completed. 
Wording on contract : 
First time buyer stamp duty paid at £XXXX  and £1000 toward legal fees ( under incentives section) 
Lets see what solicitor says but following the thread 

j_s2020

Same situation, look forward to hearing everyone’s updates tomorrow! Fingers crossed it’s good news for all 🤞🏻

grefalo

Same for us. Developer agreed to pay £15000 towards our stamp duty. My solicitor doesn’t seem to have a clue as to how we should proceed regarding this matter. Will be checking back on this forum regularly to see what other outcomes there are. 

Thanks all! 

MrLogical

Thanks all for your replies and good luck to you all. Let’s keep talking and hopefully it works out well for us all. Good luck everyone!!

davidmcn

rmd076 said:

abbb053 said:

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.

You are right - I am a little concerned about that although it’s does state the £ amount ‘as a maximum contribution’, rather than, say, ‘up to a maximum of £’! 

Yes, that seems very sloppy wording to have in the contract. They could just give you a contribution of 50p, it doesn't say they'll pay an amount equivalent to your SDLT.

SharkMoney

I think national builders will do the right thing. We’ve queried it and they are checking with head office. I expect hundreds of customers are going to be in the same boat. 

N3M3515

We're in the same situation, the wording in our contract says:
Provided that Exchange of Contracts takes place by 31 March 2020 and financial completion by the contractually agreed completion date the Seller agrees:-
1 Stamp Duty Contribution £8,500.00
2 Legal Fee Contribution £xxx
3 Deposit Paid Contribution £xxxxx
4 Upgraded kitchen and worktops, upgraded tiling, upgraded appliances, turf, carpets & vinyls range 1 throughout.
The Buyer warrants that he has disclosed to his mortgage lender all financial incentives including (but not exclusively) any discount, allowance or cashback
Our solicitor wasn't overly helpful when I queried it yesterday, although to be fair it was pretty new news at the time!

MrLogical

I read somewhere that these things are vaguely worded as it protects the seller from having to stump up more if stamp duty were to rise. If it won’t move up, then it shouldn’t move down either! It’s a fixed amount regardless of what happens after you’ve signed.