Seller pays stamp duty?

[mm511]

Looking to purchase a property for £400k, however, as it's an additional property it will incur the higher stamp duty tax of £22k.

Can I get the seller to pay my stamp duty at the point of completion so he walks away with £378k?

Pretty sure I'm not the first to think of this but from my research I haven't found an exact reason to why this won't work. Can anyone help?

[Countdown]

Surely you just ask him for a discount equivalent to SDLT and then YOU pay it as per normal?

[2 sMoKiN bArReLs]

mm511 said:

Looking to purchase a property for £400k, however, as it's an additional property it will incur the higher stamp duty tax of £22k.

Can I get the seller to pay my stamp duty at the point of completion so he walks away with £378k?

Pretty sure I'm not the first to think of this but from my research I haven't found an exact reason to why this won't work. Can anyone help?

As said, you are simply making a reduced offer.

[NickCQ]

Your conveyancer fills in the SDLT return and has to state how many properties YOU own after completion. Not sure how you get around that unless you have a friendly solicitor or you can divorce your wife and she buys it in her name only.

[mm511]

My company is making the purchase but ultimately I'm the one buying it.

I'm not after the discount I just want the tax paid by the seller, so to the earlier posters. I want to buy the house at £400k and ask the seller to pay the SDLT...does that work?

[So]

mm511 said:

Looking to purchase a property for £400k, however, as it's an additional property it will incur the higher stamp duty tax of £22k.

Can I get the seller to pay my stamp duty at the point of completion so he walks away with £378k?

Pretty sure I'm not the first to think of this but from my research I haven't found an exact reason to why this won't work. Can anyone help?

Is there a mortgage involved. If so AFAIK the solicitor would need to declare it as a seller contribution, which may affect the loan amount.

[mm511]

So said:

Is there a mortgage involved. If so AFAIK the solicitor would need to declare it as a seller contribution, which may affect the loan amount.

This sounds like what I'm looking to do, is it a complex arrangement? My mortgage is already in place and I have a deposit ready.

[So]

mm511 said:

So said:

Is there a mortgage involved. If so AFAIK the solicitor would need to declare it as a seller contribution, which may affect the loan amount.

This sounds like what I'm looking to do, is it a complex arrangement? My mortgage is already in place and I have a deposit ready.

No not really. But the lender may well say they're offering you an 80% mortgage, so they will lend you 80% of £378k instead of £400k.

[Welshbeef]

Countdown said:

Surely you just ask him for a discount equivalent to SDLT and then YOU pay it as per normal?

Assuming the seller doesn’t have another buyer without existing property.



Maybe I should try this sorry mr seller really pleased you’ve accepted my blogger but you need to take a bath on a further £30k due to be 2nd home 3% SDLT.
I wonder what would happen if he draws up a contract but it’s clear that IF you then sell he property within the 3 years you would then pay over the 3% he has essentially lent you.

That would be fair— but I’d wager OP wouldn’t think this is fair.

[Welshbeef]

2 sMoKiN bArReLs said:

mm511 said:

Looking to purchase a property for £400k, however, as it's an additional property it will incur the higher stamp duty tax of £22k.

Can I get the seller to pay my stamp duty at the point of completion so he walks away with £378k?

Pretty sure I'm not the first to think of this but from my research I haven't found an exact reason to why this won't work. Can anyone help?

As said, you are simply making a reduced offer.

And you will be paying stamp duty on that lower offer.
If you have a second home there is no way to get around the 3% - unless of course the house is gifted to you at £0, but then when you come to sell that ... 28% capital gains tax on the WHOLE value of the sale price

[2 sMoKiN bArReLs]

You do get the extra back if you go down to one property within 3 years.

[Welshbeef]

2 sMoKiN bArReLs said:

You do get the extra back if you go down to one property within 3 years.

But he wants that Plus the seller paying him the Stamp duty - very selfish greedy, over to the seller not to bend over all greased up for a rinsing

[djc206]

We got our vendor to pay our stamp duty. House was £500k, stamp duty £15k. I only had £50k as this was my first property so instead of offering a lower amount we offered £500k with them paying the stamp so effectively £485k. We had to inform the mortgage company as not all with accept a purchase incentive and we were told that most limit purchase incentives to 5% of the value. Please note this was 4 years ago and our mortgage advisor proved to be not the greatest so don’t take it as gospel.

[Welshbeef]

djc206 said:

We got our vendor to pay our stamp duty. House was £500k, stamp duty £15k. I only had £50k as this was my first property so instead of offering a lower amount we offered £500k with them paying the stamp so effectively £485k. We had to inform the mortgage company as not all with accept a purchase incentive and we were told that most limit purchase incentives to 5% of the value. Please note this was 4 years ago and our mortgage advisor proved to be not the greatest so don’t take it as gospel.

How does that work from an income tax perspective? Self assessment Joe Bloggs has paid your costs ie effective income. ?

[2 sMoKiN bArReLs]

Welshbeef said:

2 sMoKiN bArReLs said:

You do get the extra back if you go down to one property within 3 years.

But he wants that Plus the seller paying him the Stamp duty - very selfish greedy, over to the seller not to bend over all greased up for a rinsing

Vendor is free to say poke it

[Welshbeef]

2 sMoKiN bArReLs said:

Welshbeef said:

2 sMoKiN bArReLs said:

You do get the extra back if you go down to one property within 3 years.

But he wants that Plus the seller paying him the Stamp duty - very selfish greedy, over to the seller not to bend over all greased up for a rinsing

Vendor is free to say poke it

Vendor should get a legal contract with OP stating when he sells within 3 years he pays him back this “loan”

[djc206]

Welshbeef said:

How does that work from an income tax perspective? Self assessment Joe Bloggs has paid your costs ie effective income. ?

I’m sorry I don’t understand your question. Do you mean CGT?

[Welshbeef]

djc206 said:

Welshbeef said:

How does that work from an income tax perspective? Self assessment Joe Bloggs has paid your costs ie effective income. ?

I’m sorry I don’t understand your question. Do you mean CGT?

No I mean the sale incurred a tax charge on the property stamp duty. But someone else paying it for you is no different to someone giving you cash - you need to declare this which on self assessment would be income tax at your marginal rate.

I think - sure someone else on personal tax can advise but the logic stands.
It’s no different than getting someone else to pay your income tax bill or national insurance charge.

[djc206]

Welshbeef said:

No I mean the sale incurred a tax charge on the property stamp duty. But someone else paying it for you is no different to someone giving you cash - you need to declare this which on self assessment would be income tax at your marginal rate.

I think - sure someone else on personal tax can advise but the logic stands.
It’s no different than getting someone else to pay your income tax bill or national insurance charge.

There is no income tax liability because at no point have you received an income, you’ve just effectively mortgaged the SDLT and the other person has taken a lower price for the property. It’s precisely why mortgage companies want to know.

[mm511]

Welshbeef said:

Vendor should get a legal contract with OP stating when he sells within 3 years he pays him back this “loan”

Jokes aside, is this possible? I have no intentions to sell the property within 3 years?!