Stamp Duty Question

JJ87_

Hi all,

we’re in the process of buying a house and at no point has anyone asked us to see proof of funds for the stamp duty payment.

it’s now likely that it won’t complete until after 31st March so we would be liable for a 10k payment.

what sort of fine/action would be taken if I don’t pay this for a couple of months whilst I save up for it. I can probably save around 4-5k between now and end of 
March but won’t be able to get the full lot.

we started the purchase on this house around August time so always thought we would complete prior to end of March so it hasn’t been a concern before.


im fully aware that this is probably the complete wrong way to go about this but I don’t want to lose my dream house if it only means a ‘fine’ or whatever of a few thousand that I’d be able to pay a few months down the line.

is there any long lasting damage that would be done, home repossessing, ccj, adverse credit score etc etc.

Many thanks.

[Deleted User]

JJ87_ said:

Hi all,

we’re in the process of buying a house and at no point has anyone asked us to see proof of funds for the stamp duty payment.

it’s now likely that it won’t complete until after 31st March so we would be liable for a 10k payment.

what sort of fine/action would be taken if I don’t pay this for a couple of months whilst I save up for it. I can probably save around 4-5k between now and end of 
March but won’t be able to get the full lot.

we started the purchase on this house around August time so always thought we would complete prior to end of March so it hasn’t been a concern before.


im fully aware that this is probably the complete wrong way to go about this but I don’t want to lose my dream house if it only means a ‘fine’ or whatever of a few thousand that I’d be able to pay a few months down the line.

is there any long lasting damage that would be done, home repossessing, ccj, adverse credit score etc etc.

Many thanks.

Are you using a mortgage to fund the purchase? If so you won’t be able to delay payment of SDLT. 

If it’s a cash purchase and you can’t borrow the money from somewhere then these are the likely penalties:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/799537/Penalties_for_late_Land_Transaction_return__SD7__guide.pdf

p00hsticks

Assuming you're getting a mortgage to buy the property, then delaying paying the stamp duty is a non-starter, as the solicitor for the mortgage company will insist on it being paid at the point of completion.

In the unlikely event that you're a cash purchaser, then theoretically you could delay the payment if you are prepared to pay fines, but be aware that the property won;t be registeredin your name until it is.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/799537/Penalties_for_late_Land_Transaction_return__SD7__guide.pdf

JJ87_

Yeah I’m using a mortgage for some of the purchase so it’s a non starter then! 

In theory could I get a loan out on the day of completion for the remainder (4-5k) and send this to the solicitor?

Thanks guys.

tink_1983

Can you remortgage to borrow the additional for the stamp duty. This is what we've done as a cushion for the stamp duty. Its reduce the deposit amount to allow for the stamp duty.
Fingers crossed the holiday is extended !

JJ87_

tink_1983 said:

Can you remortgage to borrow the additional for the stamp duty. This is what we've done as a cushion for the stamp duty. Its reduce the deposit amount to allow for the stamp duty.
Fingers crossed the holiday is extended !

What do you mean sorry? How much deposit have you put down etc?

oldbikebloke

JJ87_ said:

tink_1983 said:

Can you remortgage to borrow the additional for the stamp duty. This is what we've done as a cushion for the stamp duty. Its reduce the deposit amount to allow for the stamp duty.
Fingers crossed the holiday is extended !

What do you mean sorry? How much deposit have you put down etc?

you pay the SDLT by reducing the size of your deposit and increasing the size of the mortgage - assuming the lender agrees to such an increase in the loan to value. The house value cannot change, so the only way to borrow the SDLT is "pay" less deposit and so increase the LTV .

property value 100k
mortgage 90K
deposit 10k so 90% loan to value 

borrow SDLT by adding to mortgage
mortgage 95k
deposit 5k 95% loan to value 
sdlt payment 5k 

Angela_D_3

oldbikebloke said:

JJ87_ said:

tink_1983 said:

Can you remortgage to borrow the additional for the stamp duty. This is what we've done as a cushion for the stamp duty. Its reduce the deposit amount to allow for the stamp duty.
Fingers crossed the holiday is extended !

What do you mean sorry? How much deposit have you put down etc?

you pay the SDLT by reducing the size of your deposit and increasing the size of the mortgage - assuming the lender agrees to such an increase in the loan to value. The house value cannot change, so the only way to borrow the SDLT is "pay" less deposit and so increase the LTV .

property value 100k
mortgage 90K
deposit 10k so 90% loan to value 

borrow SDLT by adding to mortgage
mortgage 95k
deposit 5k 95% loan to value 
sdlt payment 5k 

Doesn’t  that  involve a whole new mortgage application ?

oldbikebloke

Angela_D_3 said:

oldbikebloke said:

Doesn’t  that  involve a whole new mortgage application ?

it might, depends on lender

Speedbird676

JJ87_ said:

Yeah I’m using a mortgage for some of the purchase so it’s a non starter then! 

In theory could I get a loan out on the day of completion for the remainder (4-5k) and send this to the solicitor?

Thanks guys.

Your solicitor would want all funds, including the stamp duty, in advance of completion.

tink_1983

JJ87_ said:

tink_1983 said:

Can you remortgage to borrow the additional for the stamp duty. This is what we've done as a cushion for the stamp duty. Its reduce the deposit amount to allow for the stamp duty.
Fingers crossed the holiday is extended !

What do you mean sorry? How much deposit have you put down etc?

So we initially put down 70k deposit, but house fell through so when we found next house we knew wed never make the deadline. 
So reduced the deposit to 60k so we didnt have to find the money elsewhere.
Our mortgage adviser sorted it for us, wasnt whole new application but a change of product as the LTV changed.
I'd not recommend applying for any loans till your moved so that is not an option here.
Talk to your advisor, there will be many with similar issues atm.