Help to Buy ISA - Do fixtures and fittings count towards £250k limit?

StandingInTheSun

We've recently had an estate agent suggest to us that the £250k limit does not include fixtures and fittings. 

In other words you can be sale agreed at £250k, then as part of house negotiations get hundreds or even thousands added onto that in fixtures and fittings without it affecting your bonus.

We can't find a straight answer to this question but it's very important to us - we've been outbid before because we've always kept our top bid slightly under the £250k to allow for any extras to be added on. Our H2B ISA bonus is maxed out as well so it's not an inconsiderable sum of money we'd lose out on if we get this wrong.

grumiofoundation

I believe you can pay extra for certain items - movable items (chattels) e.g. items of furniture, a garden shed, movable kitchen units. 

Attached gov link re chattelsfor SDLT purposes - which I assume would apply in this case too. 

What you pay needs to appropriate. 

But what you can’t do is offer 50k over for a broken washing machine and a couple of manky chairs! From link looks like HMRC can investigate, if someone found to overpay would guessthat HTB ISA bonus would then need to be repaid as purchase would no longer fit requirements.

I assume you would also need to pay the extra in cash so would would need this cash available. 

https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm04010

Gavin83

Any reason you didn’t switch this to a Lifetime ISA where the limit would have been £450k?

Anyway I agree with the above. If you’re genuinely buying fixtures and fittings for a reasonable price then fine. If you’re using it to circumvent the limits of the product then you’re playing a risky game.

StandingInTheSun

Gavin83 said:

Any reason you didn’t switch this to a Lifetime ISA where the limit would have been £450k?

Anyway I agree with the above. If you’re genuinely buying fixtures and fittings for a reasonable price then fine. If you’re using it to circumvent the limits of the product then you’re playing a risky game.

Never saw it as necessary at the time as even a house at £250k we viewed as above what we would be looking at. We wouldn't be comfortable with a bigger financial purchase anyway.

Unfortunately the market has done what it has over the past two years and £250k doesn't hold the value it did before.

grumiofoundation

How much over 250k are we talking here? And what extras would you buy? 

Or is this a hypothetical and no specific property in mind? 

StandingInTheSun

grumiofoundation said:

How much over 250k are we talking here? And what extras would you buy? 

Or is this a hypothetical and no specific property in mind? 

It's essentially a hypothetical question.

No clue what extras we would buy as obviously don't know their cost or what even would be included, but we've always presumed it would be unusual to spend more than £1-2k on fixtures and fittings.

That's why any offers we've made on houses in that ballpark we've maxed out at £248/249k, because we're leaving a gap for extra costs. And we've lost out on houses because of it.

But it's now been suggested to us that we don't actually need to do that as fixtures and fittings costs are separate and therefore wouldn't push us above the limit.

StandingInTheSun

grumiofoundation said:

How much over 250k are we talking here? And what extras would you buy? 

Or is this a hypothetical and no specific property in mind? 

It's essentially a hypothetical question.

No clue what extras we would buy as obviously don't know their cost or what even would be included, but we've always presumed it would be unusual to spend more than £1-2k on fixtures and fittings.

That's why any offers we've made on houses in that ballpark we've maxed out at £248/249k, because we're leaving a gap for extra costs. And we've lost out on houses because of it.

But it's now been suggested to us that we don't actually need to do that as fixtures and fittings costs are separate and therefore wouldn't push us above the limit.

[Deleted User]

it will be based on what the solicitor reports as the purchase price.   If its a £249k purchase with £5k to be paid for the hot tub or something then that will meet the rules as the purchase is £249k.   
Sometimes people will alternatively say 'I'll give you £254k for the house if you leave the hottub but £249k without it'.  This then allows them to throw most of the cost of the extras on to the mortgage (subject to survey and lenders rules of course).