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.

what is your point?
the process is easy:
own a home that you live in
own a property you do not live in.
You own 2 homes

Scenario 1
buy a 3rd property which will be your new main home - SELL the old main home on/before the completion date of the purchase - that is classed as REPLACEMENT and therefore the standard rate SDLT applies to the new purchase

Scenario 2
as above except the sale of the old place completes after the purchase of the new > a refund is claimable if the sale completes within 3 years of the sale of the old since you have them met the replacement criteria

scenario 3
you own one property which you live in as main home
you buy another property and let it as BTL
you have purchased an additional property which is not your main home, additional rate SDLT applies to that purchase

no they have not - possibly you do not understand the marriage rule

property B was the main home for both of them by virtue of their marriage
property B was sold and replaced by property C
standard rate applies to C

property A, owned in husband's sole name, is irrelevant in that precise set of circumstances

Op has a beneficial interest in mothers house

• OP does not own any other property
• she paid the deposit to purchase it and paid off the mortgage
• the property is owned as tenants in common with her parents - I have lost track if there is a post confirming what exact % split is in place and whether that is formally documented as declaration of trust
• SDLT if legal ownership is uncertain then one also looks at who has beneficial interest in a property if not named on the deeds (irrelevant in this case as OP is on the deeds)
• if Op buys another property then she going from having 1 to having 2 properties. Higher rates SDLT will apply to purchase of property 2 because.
• the fact property 2 is her only / main home is irrelevant as she has NOT REPLACED an existing main home by SELLING it since her parents remain living there

If OP wants to avoid the higher rate than she needs to remove her beneficial interest.
However OP is resistant to that as she wants has an awareness of a) the profit from the property when it is sold after her parents death and b) not unreasonably she does not want to lose her own money invested in it if parents are forced to sell it to fund their own care home fees.

In terms of care home if there is a declaration of trust in place confirming her exact % ownership of parents then that share cannot be taken to fund care home fees. Similarly her investment is projected as the declaration means she gets the stated % when it is sold

The bottom lines remains however OP must pay higher rate because she is not selling her main home and replacing it with a new one

The only way to change that circumstance is to come off the deeds and remove her beneficial interest ie lose her right to a % of the sale
As long as she stands to profit from the sale she has an interest in the property that counts against her for SDLT when buying a further property

Obviously to protect her money she needs to convert the amount currently "invested" in her parents home (deposit + mortgage payments) into a LOAN for a fixed sum of money - NOT a % share of the property.

That loan would be registered as a charge against the property and therefore would be preferentially repaid first when the property is sold. She would NOT get any profit from that sale, but she would get her money back
As the loan would mean she did not have a beneficial interest in parent's property, the higher rate SDLT would not apply when purchasing her new main home

In coming off the deeds OP would be making a "disposal" of a property for CGT purposes, however, unless I have missed a post, it seems OP has herself lived in the property as her main home for the entire time she was on the deeds.
Thus CGT main home rules dictate that she would be entirely exempt from any CGT on its disposal

a win win outcome, standard rate SDLT and money still protected (although without any element of eventual profit, so exposed to loss by inflation)

The OP should listen to whoever is collecting the money for giving advice.

Would the OP pay the stamp duty when she sells the house she is about to buy some years down the road to help the buyer out? This entire situation makes me mad. I wish this daughter bought a house and let her parents live with her.

No, this isn't the house sellers problem. You are seriously deluded.