Stamp duty

Stevie1

Sometimes I see houses over the £250K threshold, advertised as "seller to pay stamp duty".

I can't get my head around the benefit to the seller - why not just advertise the house at a respectively lower level? Or is it some sort of scam where the seller can claim money back somehow?

Also, I know some people are able to get around that annoying tax - is that legal and is it worth asking our solicitor about?

merlinthehappypig

I've no idea why they do it either. As you say, better all round if the house is just under the limit.

You can pay just under the stamp duty limit and then pay an agreed amount for 'fixtures and fittings', but this has to be a reasonable amount and representative of the actual value ie. second hand. You certainly won't get away with paying £249995 for the house and £20000 for a fridge and some used carpets.

The Inland Revenue will look closely at all transactions just under any of the limits and the fines can be very large if they prove fraud.

We had a similar problem with the house that we are buying. They wanted £500000 for the house and £10000 for carpets and curtains. We flat refused on the basis that it was tax fraud and they came round eventually.

VFR-Rider

Well it would affect the property (sold) prices... and of course when negotiating your are negotiating on a 250k house, not a lower priced one etc....

I can't really see any tangible benefits to the seller, however of course it's a selling point and in this market every little may help!

kingkano

Because its a mental barrier to buyers to go above 250k (in fact anywhere upto 275 some people try to use this excuse to reduce the price down to 250). If you believe your house is worth 260 for example you will never get it because of this barrier. If you offer to pay the extra stamp (5k) you might well get 255 or 260 (if you price correctly) because you've removed the barrier for buyers.

If its worth 260 and you advertise at 255 people will still only offer 250. DO you see where I am going?

Nobody is able to 'get around that annoying tax' without acting illegally. You can add maybe 2k for fixtures and fittings, IF you can find a solicitor willing to do it. You can give someone an envelope of cash for the difference over 250, but it'd be illegal, as well as potentially dangerous for a seller (as well as potentially reducing your future resale value - as the cash wouldnt be included in the land registry sale figure).

Anyone tells ya different is fibbing....