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Stamp Duty on New Build: Need clarification

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Stamp Duty on New Build: Need clarification

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I am sure this has been raised previously following yesterday’s announcement in regards to SDLT, but we would greatly appreciate any input as our situation is a little complex and unique. 
We have purchased a new build property, we are first time buyers and using the benefit of the equity loan scheme too, we exchanged contracts October 2019, due to complete August 2020, in both our mortgage offer and contracts it is written that the house builder has offered to pay a £14k incentive to the then owed £19k total SDLT for the property, thus leaving us with the remaining £5k. Where do we we stand in regards to the £14k originally being paid by the house builder, do we have a right to ask for the difference between what they will now pay (£4,750) instead of the previous £14k? As the incentive is written into our mortgage offer will this be affected by the change in the stated figures/incentives? We are confident we won’t now have to pay the £5k that was remaining on our part following this announcement, which is a great immediate saving, but want to know if we could be entitled to more? If the house builder  is not willing to refund the £9k difference, which I feel may well be the case, we will ask them to clear the remaining balance on the agreed extras for our property, which I think is very fair and achievable considering it is only £3k outstanding on our account. 

I look forward to your comments, thank you all in advance. 
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Replies

  • davidmcndavidmcn Forumite
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    What exactly does your contract say? If it's a fixed amount then that's what you'll still get.
  • offshore24offshore24 Forumite
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    davidmcn said:
    What exactly does your contract say? If it's a fixed amount then that's what you'll still get.
    In our mortgage offer, on the valuation documents for mortgage purposes, its states:
    Sales incentives of stamp duty at £14k and legal fess of £500 have been disclosed on this sale and this should be confirmed by the lenders legal adviser. The effect of these on the selling price has been reflected in the valuation. 
     Be interested to know where we stand and if we have any way of being refunded without having to apply for a new mortgage.
  • edited 9 July at 9:25AM
    davidmcndavidmcn Forumite
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    edited 9 July at 9:25AM
    davidmcn said:
    What exactly does your contract say? If it's a fixed amount then that's what you'll still get.
    In our mortgage offer, on the valuation documents for mortgage purposes, its states:
    Sales incentives of stamp duty at £14k and legal fess of £500 have been disclosed on this sale and this should be confirmed by the lenders legal adviser. The effect of these on the selling price has been reflected in the valuation. 
     Be interested to know where we stand and if we have any way of being refunded without having to apply for a new mortgage.
    As far as your lender is concerned it just means you're getting a discount of £14k, they don't care what your SDLT bill actually is. You don't need to go back to the lender about it.

    But I meant what does the contract between you and the developer say, as I presume your OP wasn't taken verbatim from that?
  • bucksblokebucksbloke Forumite
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    I don't think this situation is complex, you negotiated that the developer would pay you something which you don't have to pay anymore. They could state the contract was specific and relating to SDLT only, I would hope that they would agree to pay off your incentives. However you cannot get cashback as part of the Equity Loan agreement. 
  • offshore24offshore24 Forumite
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    davidmcn said:
    davidmcn said:
    What exactly does your contract say? If it's a fixed amount then that's what you'll still get.
    In our mortgage offer, on the valuation documents for mortgage purposes, its states:
    Sales incentives of stamp duty at £14k and legal fess of £500 have been disclosed on this sale and this should be confirmed by the lenders legal adviser. The effect of these on the selling price has been reflected in the valuation. 
     Be interested to know where we stand and if we have any way of being refunded without having to apply for a new mortgage.
    As far as your lender is concerned it just means you're getting a discount of £14k, they don't care what your SDLT bill actually is. You don't need to go back to the lender about it.

    But I meant what does the contract between you and the developer say, as I presume your OP wasn't taken verbatim from that?
    This is the wording of our contract: 

    The Buyer has details of the Options it has ordered and the Seller has given to the Buyer details of the Incentives referred to in condition 1.2. The Seller shall pay the monetary incentives to the Buyer’s Conveyancer by cheque within 10 working days of legal completion or the Seller may at its sole discretion deduct these from the balance of the Price on legal completion.

    So if reading and understanding correctly, our solicitor will receive the incentives / payment from our builder, which they will then use to pay off the SDLT, and the remaining amount is then coming to us ? or used for payment of legal services ? or returned to our builder?

    Advice and response is appreciated. 
  • davidmcndavidmcn Forumite
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    davidmcn said:
    davidmcn said:
    What exactly does your contract say? If it's a fixed amount then that's what you'll still get.
    In our mortgage offer, on the valuation documents for mortgage purposes, its states:
    Sales incentives of stamp duty at £14k and legal fess of £500 have been disclosed on this sale and this should be confirmed by the lenders legal adviser. The effect of these on the selling price has been reflected in the valuation. 
     Be interested to know where we stand and if we have any way of being refunded without having to apply for a new mortgage.
    As far as your lender is concerned it just means you're getting a discount of £14k, they don't care what your SDLT bill actually is. You don't need to go back to the lender about it.

    But I meant what does the contract between you and the developer say, as I presume your OP wasn't taken verbatim from that?
    This is the wording of our contract: 

    The Buyer has details of the Options it has ordered and the Seller has given to the Buyer details of the Incentives referred to in condition 1.2. The Seller shall pay the monetary incentives to the Buyer’s Conveyancer by cheque within 10 working days of legal completion or the Seller may at its sole discretion deduct these from the balance of the Price on legal completion.

    So if reading and understanding correctly, our solicitor will receive the incentives / payment from our builder, which they will then use to pay off the SDLT, and the remaining amount is then coming to us ? or used for payment of legal services ? or returned to our builder?

    Advice and response is appreciated. 
    You'll need to tell us what condition 1.2 says.
  • offshore24offshore24 Forumite
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    Section 1.2 wording:
    1.2 The following monetary Incentives will be given by the Seller to the Buyer (see condition 6)
    • Legal Fees paid £ 500.00
    • Stamp Duty paid £14,000.00
    TOTAL £14,500.00

    Thanks Davidmcn. 

  • jon81ukjon81uk Forumite
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    Section 1.2 wording:
    1.2 The following monetary Incentives will be given by the Seller to the Buyer (see condition 6)
    • Legal Fees paid £ 500.00
    • Stamp Duty paid £14,000.00
    TOTAL £14,500.00

    Thanks Davidmcn. 

    I would read that as you receive those sums of money.
  • davidmcndavidmcn Forumite
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    jon81uk said:
    Section 1.2 wording:
    1.2 The following monetary Incentives will be given by the Seller to the Buyer (see condition 6)
    • Legal Fees paid £ 500.00
    • Stamp Duty paid £14,000.00
    TOTAL £14,500.00

    Thanks Davidmcn. 

    I would read that as you receive those sums of money.
    As would I.
  • offshore24offshore24 Forumite
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    First Post
    That is what i am to understand also reading that wording, across both sections, thank you all for your input. I am awaiting a call from the solicitor to confirm the above and our position when we complete, but i see that we are due to receive the remaining amount on account once SDLT is paid, and solicitor fees paid, which should be circa 8k back to us. Solicitor is on leave till next week, so will update again once we have the above confirmed. 

    Thanks All. 
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