Advice on using a LISA to purchase house + fixtures and fittings

owenjt

Lover_of_Lycra said:

Your list of fixtures and fittings really did make me laugh out loud. The kitchen comes with the property as does the bathroom suite. If you had neither a functioning kitchen or bathroom the property would be unmortgageable. Extra for the boiler and heating system which I assume is fully integrated into the property...🤣🤣🤣

They're still classed as 'fixtures': https://nested.com/blog/posts/what-are-fixtures-and-fittings

Tiglet2

Imagine a scenario where you could pick the house/garden up and turn it upside down.  All the parts which fall out are the type of fittings you can purchase from the seller as an extra separate negotiation.  All the parts which stay in situ are fixtures and fittings which should come included with the sale price.

The seller completes the Fixtures & Contents form as part of the contract and will list on there all the items not included in the sale but are negotiable.  It is highly unlikely that any of these would amount to £20,000, unless the items are high value, such as a summer house or hot tub etc, but a £20,000 "charge" for fixtures and fittings would look unrealistic and is likely to be queried.

owenjt

From Hargreaves Lansdown:

Tiglet2

owenjt said:

From Hargreaves Lansdown:

You're not understanding the difference between fixtures (i.e. part of the property and sale price) and fittings (not part of the property and negotiable).

[Deleted User]

owenjt said:

Lover_of_Lycra said:

Your list of fixtures and fittings really did make me laugh out loud. The kitchen comes with the property as does the bathroom suite. If you had neither a functioning kitchen or bathroom the property would be unmortgageable. Extra for the boiler and heating system which I assume is fully integrated into the property...🤣🤣🤣

They're still classed as 'fixtures': https://nested.com/blog/posts/what-are-fixtures-and-fittings

You're right, we're all wrong so go ahead and offer £450k for the property plus however much for the fixtures and fittings.  Do let us know how you get on by updating the thread.  Peace out.

SDLT_Geek

In fairness to @owenjt, some of the guidance around this is confusing; with the Hargreaves Lansdown explanation suggesting (misleadingly) that the limit of £450,000 is the house price without any sums paid for fixtures.  This is misleading, because in English law the "land" includes the building and fixtures.  

Any part of the price agreed referable to fixtures is in fact part of the house price and therefore counts towards the £450,000 limit.  It is loose items ("chattels" in the jargon), such as furniture, which are not part of the house price and which sit outside the £450,000 limit.  It is generally accepted that carpets (even fitted ones) and curtains count as chattels and so are not part of the house price.

My experience in this comes from the world of stamp duty land tax, where SDLT is payable on the "land price" but not on sums payable for chattels.  In that context I am familiar with the division between sums for:
(a)  Fixtures, which are "part of the land" and
(b) Chattels, which are not "part of the land".
I believe the same distinction applies to the £450,000 limit, despite the misleading guidance.

owenjt

SDLT_Geek said:

In fairness to @owenjt, some of the guidance around this is confusing; with the Hargreaves Lansdown explanation suggesting (misleadingly) that the limit of £450,000 is the house price without any sums paid for fixtures.  This is misleading, because in English law the "land" includes the building and fixtures.  

Any part of the price agreed referable to fixtures is in fact part of the house price and therefore counts towards the £450,000 limit.  It is loose items ("chattels" in the jargon), such as furniture, which are not part of the house price and which sit outside the £450,000 limit.  It is generally accepted that carpets (even fitted ones) and curtains count as chattels and so are not part of the house price.

My experience in this comes from the world of stamp duty land tax, where SDLT is payable on the "land price" but not on sums payable for chattels.  In that context I am familiar with the division between sums for:
(a)  Fixtures, which are "part of the land" and
(b) Chattels, which are not "part of the land".
I believe the same distinction applies to the £450,000 limit, despite the misleading guidance.

Thank you for clarifying - this is very helpful. It's very confusing and the way it's worded seems to suggest that the fixtures and fittings are not part of the £450k.

So if fixtures are included in the purchase price and fittings are not, could we offer £450k + a reasonable amount for fittings (washing machine/dryer, dining table, outdoor table) and still use our LISA?

AdrianC

owenjt said:

So if fixtures are included in the purchase price and fittings are not, could we offer £450k + a reasonable amount for fittings (washing machine/dryer, dining table, outdoor table) and still use our LISA?

Yes.
You pay £450k for the house and all the usual things that are part of it.

Then you pay a fair market value for that second-hand washing machine, that second-hand dining table, that second-hand outdoor table. (A couple of hundred quid should cover those.) Or you don't, and the house sale continues unchanged without those chattels.

SDLT_Geek

I avoided the use of the word “fittings” in my post, as to my mind that adds another potential confusion!  I would divide between
“fixtures” (part of the property) and
“chattels” (loose items for which a separate price can be agreed outside of the “property price”).

Subject to my “semantic” point, I agree with OP; a separate figure could be agreed for washing machine/dryer, dining table and outside table.  These sums (for chattels) would sit outside the £450K cap.

owenjt

So I spoke to a few solicitors about this. Generally fixures are included in the purchase price but can be excluded in certain circumstances, e.g. if a new kitchen has been installed or will be installed then you can negotiate for this outside of the purchase price.