New house under 120,000 - why did I have to pay out stamp duty?

twisty

Hi, hope someone can help.

My girlfriend and I recently bought a flat and, when we came to complete, the stamp duty was included in the solicitor's bill. Confused (as our flat was 114,000), we rang the solicitor and he said we had to pay out the duty and then we'd get it returned to us within about 3 weeks. Now, a month later, we have heard nothing. Our finiancial advisor seems confused about the whole thing, the solicitor assures us he is chasing it up "on a daily basis" but I feel he is fobbing us off. Any idea how we get our money back and why we had to pay it in the first place?

Thanks in advance for any comments

hopefulfooluk

You are getting absolute title to the flat aren't you, not a shared ownership scheme where you get 75% for £114k or something? Because that would make the property over 120k and you may well get the bill for the stamp duty.

If however the property's whole title was sold for 114k, you wouldn't have had to pay stamp duty but you may have had to pay for the SDLT form which says you don't have to pay any. But this is certainly not as much as the stamp duty would be. Might be worth contacting the Law Society if you feel that your solicitor is fobbing you off - the money may well be just sat in his account earning nice amounts of interest for him.

Good luck,

Chris

Bossyboots

twisty wrote:

Hi, hope someone can help.

My girlfriend and I recently bought a flat and, when we came to complete, the stamp duty was included in the solicitor's bill. Confused (as our flat was 114,000), we rang the solicitor and he said we had to pay out the duty and then we'd get it returned to us within about 3 weeks. Now, a month later, we have heard nothing. Our finiancial advisor seems confused about the whole thing, the solicitor assures us he is chasing it up "on a daily basis" but I feel he is fobbing us off. Any idea how we get our money back and why we had to pay it in the first place?

Thanks in advance for any comments

Either you had to pay the stamp duty or you did not. It looks to me as though the solicitors have made an error in including it on the completion statement and have actually paid it out. They are now waiting for their refund before refunding you. This is not acceptable. They are in clear breach of the rules. It is not your problem if they cannot afford to repay you from their own funds.

You need to contact them again and tell them that you are no longer prepared to wait for the money, that they must refund it to you now and that you are aware they should never have taken the money from you.

If this does not work, you do need to contact the Complaints Handler at the firm. All firms must have one and they have to give you their details (in fact, you should have been given those at the outset). Your recourse after that is the senior partner and then the Consumer Complaints Service. Don't be fobbed off any more. If you own solicitor gives you the same story, immediately invoke their complaints procedure. Don't wait any more, do it the same day. If the complaints handler is not available there and then, speak to someone else and leave a message for them to contact you. Make sure you get their name.

This is a serious matter and you need to make them aware that you know that.

Even when you get your money back swiftly, you would be doing a service to others to report it anyway.

twisty

thanks for the advice guys. The solicitor told us that it was quite normal and that we had to sign this form that said we were exempt from stamp duty and that it would be refunded in the same way that income tax is refunded to a student, for example. We phoned Inland Revenue since I posted the first message and the guy was basically like "what do you mean you are waiting for money?" So we told him. He replied "so are you after some sort of relief? You're in a disadvantaged area?" As you can imagine this was infuriating. I've left 3 messages with both the financial advisor and the solicitor but no-one has got back to us. This is certainly a very strange way of doing things and now i'm even more worried after realising that it's not the norm. I thought the idea of raising the stamp duty level was so people like us didn't have to come up with an extra grand from somewhere. Little use if you have to pay it out to get it back!

rizla01

the money may well be just sat in his account earning nice amounts of interest for him.

Yeah Right!!

Where from, I wonder?

GDB2222

rizla01 wrote:

Yeah Right!!

Where from, I wonder?

Assuming stamp duty was £1140, then interest earned would be say £4 per month. I cannot imagine that a solicitor would risk his reputation over such a small amount.

Sounds more like a balls-up to me. The threshold only changed in March from £60k to £120k and perhaps someone made a mistake. Still, you ought not to be out of pocket and you should insist on a proper response.

Bossyboots

I don't think it is sitting in the solicitors account, I think it as I said and GDB2222, that someone has made a mistake.

However, this is the solicitor's mistake, this money should never have been taken and you are entitled to it now, not in a day, a week or anything else. As I said, if you do not get a guarantee that you will get it tomorrow report it higher up in the firm.

twisty

just phoned another solicitor and he said we shouldn't have had to pay it. Then phoned the Law Society and they say we may not be exempt anyway because it depends what area you live in. I informed them that this was not what our solicitor had told us. So now we are phoning the Land Registry to see if we are getting it back and, if not, we will make a formal complaint to the solicitor and demand that they pay us the money

tcall

err... my understanding is that if it's under £120,000 it's exept regardless of area.

rfeenie

up to and including £120000, that pound is a deal breaker!

zzzLazyDaisy

twisty wrote:

Then phoned the Law Society and they say we may not be exempt anyway because it depends what area you live in.

This is rubbish - someone at the Law Society is obviously reading from old info - the SD requirements changed at the last budget and ALL properties under £120k are exempt. There are areas of social regeneration that are designated as SD exempt, regardless of purchase price, but that has nothing to do with your problem, which is that a mistake has been made by your solicitor, and you are being fobbed off while they try and sort it out.

In my opinion you are doing yourself no favours contacting the Law Society, Land Registry etc - you will be passed from pillar to post. What you need to do is start the complaints procedure with your solicitor (they are required, by Law Society Rules, to have a compliants procedure).

Do it in writing, stating simply that you wish to invoke the complaints procedure as you have wrongly been charged SD on a property which is below the SD threshold, your solicitor has failed to reimburse you despite requests, and you require immediate repayment of this money failing which you will make a formal complaint to the Law Society. State also that you require a written response within 14 days.

Keep a copy of your letter.

Do it now!!!

Daisy