To ask seller to reduce asking price due to stamp duty increase

[Ouch12]

Hello,
I am on the deeds for my parents house. They couldn't qualify for a mortgage as they were too old, so I was added to the mortgage.

I am now buying a house for myself - purchase has been ongoing for 2 months.

However, my can't buy me out from their current home - they just don't have the money.

In the Budget stamp duty on 2nd homes increased for 3% to 5%. This means I will need to find an additional £10k for stamp duty, which I don't have.
I will try to increase the mortgage amount to cover the extra £10kz

If the bank don't, I don't know how I will be able to afford the additional £10k. My parents are already gifting me money, so I cannot ask them any more.

Worst case, I might ask the seller to reduce the price by £3k -£5k but I'd imagine they'd be pissed.

Would you be willing to reduce the price if you were selling.

Your problem not the sellers

I think you need tax advice, your name being on the land registry may not mean your parents home is your primary residence. It sounds like you are buying your primary residence so your parents home is your second home? Do you pay the mortgage? Are you the only owner with the land registry on the property your parents live in?i would think that you are buying a place to live in that is your residence not a second home. You should speak to a tax specialist and a solicitor and also consider what your parents Will states if they do have their names on the land registry. Are they paying you rent? It could be their home is your second property? If you are their landlord are you declaring the rental income?

when you purchase your conveyancing solicitor will need to make the payment and know the answers, I would start with asking them not trying to negotiate a cut.

Yes - if I had to sell fast and flee the country for some radical movie plot worthy reason. Otherwise nah. I’d think you were having a laugh!

Can you become guarantor on your parents place so avoid home ownership? This would enable you to purchase the second at the lower rate.

We bought our first flat in the negative equity time. It was still less than rent and we put a bit aside in case we needed to cover the equity.

And if course we had security of tenure and were no longer being ripped off paying "admin" charges every six months and all the rest.

Your name is on their deeds, is the mortgage u took out on their house paid now as you seem to imply in one of your responses that considerable time has passed ? If so just remove your name from their deeds ? This was always going to be the case unfortunately but the increase is significant and I can see why it’s a problem. I’m a seller and a buyer myself atm and every penny is accounted for so a drop from out purchaser would significantly affect us .

Anyone in negative equity at least 14 years into a mortgage has made some very poor financial decisions.

Im not talking about people with cladding issues, or those trapped on SVRs.

Nowhere have prices fallen by so much that someone more than halfway through a standard mortgage is in negative equity.

The stamp duty doesn't apply until April 2025 I think

I understand your dilemma. The only way to do this would be to get the owners to drop the price a bit but give them a cheque for the difference so they don’t miss out. A bit underhand but it’s a shame you’ve been penalised with the stamp duty rise especially as you were in the process of buying before budget.

ask them to go 50/50 - is it fair? no but they may prefer to do that then the deal fall over.

It's immediate

the transaction is between connected persons (blood relatives) so the market value rule applies - HMRC have a whole department dedicated to checking property values so a "low" one won't cut it.

fundamentally incorrect.
OP owns a property that is not being sold off
OP will be buying another property
The higher rate SDLT will apply for purchasing an additional property

This government are fools , it’s so wrong to put anyone mid sale or purchase in this situation, should if they where going to do this
been form April , it’s going to effect so many people, chains will break down because of it and so many people will be unable to proceed with on going purchases , hence lost fees etc
hardly good for the economy!
the associated business from every house move is huge from removal companies to trades furniture suppliers etc
I totally understand your dilemma, really difficult, but it may be worth trying to salvage the situation by splitting the cost with your vendor, as the loss for them in fees etc and losing any on going purchase themselves may
be a deciding factor,
another avenue I would try failing that would be to buy with a buy to let mortgage,
while you unpick the whole thing
if I was your vendor I would stay with it
the housing market will definitely wobble
with this bunch of muppets in government!
good luck Op

might work

wrong
parents continuing to live in the property that is now owned by the OP means the property remains within IHT

If it's ex council add pp suggested surely it'd be under the limit anyway
Most likely done to avoid paying for care after the first parent passes away if the second parent needs care

no idea what you think that means
OP owns a property
higher rate SDLT applies to purchase of an additional property, it is not the purchase of a "second home" that triggers it, it is about increasing the number of properties you own, not what you use them as.

but it will not be a "second home" in terms of council tax
she may still own 2 properties but,

• OP will no longer be living in her parents one so only her parents would be liable for council tax on that one as they are the residents so rank above her as merely a (co)owner
• Op will be living in the new house as her main residence so paying normal rate council tax

Not quite that simple. When I bought my house I had also inherited half of my mother’s house. My step father still lives there and owns the other half. My solicitors told me that the higher stamp duty was not applicable for the house I was buying because the house I owned was not my primary residence and I had no current financial gain from it.

I suspect you do not know the full details of your mother's situation (or mother was economic with the truth when telling her solicitor what her circumstances were)
"replacing" main home means you sell it, ie cease to be its owner
simply changing address whilst retaining ownership of the previous home does not remove the liability to paying higher rate SDLT

your understanding of the solicitors explanation is overly simplistic, but a full explanation is irrelevant in this thread

I've had this the other way. I wanted to buy a house, viewed it, agreed a price and the date was set up for exchange.

Close to the date of exchange, I got a call from the estate agent - the house the other party was buying was more expensive now - would I be willing to up my offer to cover that? Despite being close to the exchange date, my response was 'No. They can fuck right off and you can tell them precisely that.'

Oddly enough, I never heard another word about wanting more money. A right pair of CFs.

I would think that you're likely to get short shrift from the other party.

Thanks all for your messages

1. The house isn't a council house
2. My parents couldn't afford the house, so I was added to the deeds and mortgage. I paid a deposit and contributed to the mortgage.
3. My concern is that I currently have a right to this house. If I remove my name, there is a risk care home fees will take everything, and I don't even get my original amount back. But this could be 2 or 15 years away.

Just ask @Ouch12. No harm. Estate agents will be dealing with a lot of these renegotiations at present following the tax changes. It is irritating for sellers but it's also a very small amount of the purchase price.