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SDLT Increase

13

Comments

  • KiwiCoop
    KiwiCoop Posts: 116 Forumite
    Part of the Furniture 100 Posts
    It could be worse.  You could have bought a second house at auction yesterday - no get-out for me!
  • TheJP
    TheJP Posts: 1,878 Forumite
    1,000 Posts Third Anniversary Name Dropper
    In some ways the OPs reaction is what the government is hoping for, either more money in SDLT for the countries coffers or another house for a person to live in rather than have as a second home.  
    Ahh but its not usually a second home. The most common use case is a second property - i.e. buy2let. So that would be one less rental on the market. The person who might have rented that property is unlikely to be able to afford to buy. So as I see it the net effect is downward pressure on property prices (good many would say) and upward pressure on rentals.
    Or the FTB renting frees up another rental by buying this house...
  • TheJP
    TheJP Posts: 1,878 Forumite
    1,000 Posts Third Anniversary Name Dropper
    SonnyH said:
    TheJP said:
    mebu60 said:
    TheJP said:
    mebu60 said:
    Yes. SDLT is at completion. 

    You could try renegotiating the purchase price.
    I don't see why the seller should stump up the cash to pay for the tax the buyer has to pay. Its the buyers responsibility to pay this tax not the seller.
    The buyer would factor in SDLT at the prevailing rate when making the original offer and agreeing a price. If that goes up prior to exchange the buyer has the option of swallowing the increase or renegotiating the price. The seller does not have to accept the latter but then runs the risk of the buyer withdrawing. The original buyer would likely have made a lower offer had they known of the increased rate. Any prospective new purchaser will be factoring in the 5% rate prior to making an offer. It is the buyer's responsibility to pay it as you say but the buyer will have costed that in their calculations prior to agreeing a price. Prior to exchange the potential buyer can withdraw on a whim let alone because their costs have just increased. 
    Only prospective buyers buying a second home would be factoring in the 5%, not a FTB or a sale & purchase buyer. If a buyer said they are offering £x due to the increase in tax then id say ok thanks but no thanks, The OP will either have to swallow up the tax increase or think carefully about buying a second home.
    I guess the main frustration is the 'effective tomorrow' element. We're four months into a painfully slow buying process (the house buying/selling in England & Wales is dreadful for all parties, but that's a whole different thread and debate). To suddenly have the price changed is unreasonable (as a poster correctly pointed out, we'd factored tax costs in using the govt's own SDLT calculator). It's also very unfair to the seller if they end up back at square one if we decide not to proceed.
    Again its all down to circumstances, the seller may have had many offers/interests that they could call on to see if they would like to proceed. They may decide not to sell at all or they may have time to relist. Who knows. I guess the only way you can find out is to make a new offer and see what happens.
  • SDLT_Geek
    SDLT_Geek Posts: 2,762 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    KiwiCoop said:
    It could be worse.  You could have bought a second house at auction yesterday - no get-out for me!
    If you bought in a traditional auction, so that there is a binding contract, you should not have to pay the 5% surcharge, providing the contract is not varied and you stick to the same buyer.  The draft legislation for the transitional provisions is here: https://assets.publishing.service.gov.uk/media/67209bf934853837d7fc40f8/SDLT_draft_autumn_2024.pdf

    In fact exchanging contracts today can work for the transitional provisions.
  • It’s frustrating how timing with SDLT can add unexpected costs. If renegotiation isn't possible, withdrawing might make more sense financially, though it’s a tough call with so much already invested in the process.

    Hope you find a solution that works!
  • fizio
    fizio Posts: 426 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Agree its a tough spot and it was always likely that something would happen in this area - only option that I know some people took was to exchange before budget and hope the +2% date would be exchange and not complete. 
    I agree with a few others that it's pretty normal to go 50/50 with seller - worst thing they can do is say 'no' or make a counter offer. All depends on circumstances and chains etc so good luck.. 
  • youth_leader
    youth_leader Posts: 2,745 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    edited 30 October 2024 at 5:42PM
    @SonnyH, do you think they might go 50/50 with you?  Oh sorry, just seen @fizio above was hidden before - I do think it is worth a punt.
    £216 saved 24 October 2014
  • EssexHebridean
    EssexHebridean Posts: 23,843 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    KiwiCoop said:
    It could be worse.  You could have bought a second house at auction yesterday - no get-out for me!
    “Exchange” happens in an auction purchase when the hammer falls, surely, so you will be fine - when your solicitor deals with the SDLT submission they will input the contract date - yesterday - and the SDLT will still be at the current (3%) additional rate. 
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
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  • mebu60 said:
    Yes. SDLT is at completion. 

    You could try renegotiating the purchase price.
    Good advice.
  • In some ways the OPs reaction is what the government is hoping for, either more money in SDLT for the countries coffers or another house for a person to live in rather than have as a second home.  
    Exactly, and immediate effect as well, not a bad policy actually.
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