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.

You should be paying the normal rate not the second home rate. All you have to do is prove you weren't living with parents....or have you been?

If the mortgage is paid off now, and you're no longer needed for the intended purpose, then come off the property and problem solved. You're not a home owner and not in the 2nd homes bracket for stamp duty. Simple

Asking the seller to take the hit in this scenario is out of order.

I would ask and explain why. They could say no, but they may not!

No you can't ask for this reason. However I just listened to a podcast today (meaningful money,) and it was talking about this scenario and there are mortgages which allow you to be on the mortgage but where you don't own the house. So it wouldn't affect you for stamp duty. This means you would have to remortgage against your mum and dad's house but potentially worth looking into. I will post the episode if you want to have a listen.

Actually have you been living at home with your parents in the property as you main residence? if so gift/disposal to them no cgt

That wasn't to the OP! I thought I had quoted WhereIsMyLight's post about dissing the wallpaper and garden, etc. Sorry.

Sorry for your situation and well done for being a good child and helping elderly parents. Ask the seller to split it. If they’re keen to sell and you’re well down the line they may well reduce their price. Losing £5k now versus the pain of re-marketing the house, hoping someone else offers what you did and actually proceeds etc means they may well accept it. This is life. Until the papers are signed you can renegotiate. Good luck.

not necessarily true. pension in some cases is seen as income Livemore do. or at least give it a try, my late 85 year old mother had a lifetime mortgage.Its not desirable of course and not desirable in the punitive little world of mumsnet where everyone is blamed for their poverty and 'not making the right choices' and the system that creates this crap is not challenged.Life happens and people cannot always help their own mess so what do you want them to do? It is not always wilful spending or being lazy or profligate.But yes they had better sort it when they cannot or better still become homeless and ignored by the nice sensible mumsnet types who made all the right choices and were not influenced by political forces beyond their control.jeez.the empathy

The Meaningful Money Personal Finance Podcast: The Bank of Mum and Dad traffic.libsyn.com/secure/meaningfulmoney/MMP357.mp3?dest-id=119595

Hope this works

"Get a low valuation to avoid CGT" - otherwise known as criminal tax evasion?

Bad advice.

Yes i have been living with my parents.

I'm guessing this would negate the IHT benefits the OP was hoping for.

I have no idea what the rules are for this sort of thing, but could they just buy it off you for like £1 or something?

I agree.

There is no reason for you to remain on your parent's house deeds, now that the mortgage is paid off. You are asking the seller to take a hit for a choice you are making.

I've paid close to £75k, so selling for £1 isn't great for me.
I will speak to the broker.

If I’ve understood this all correctly… You are not just “on the deeds” - you are a joint owner of your parents’ unencumbered property. You know this and want to retain this position (probably for some IHT benefit), because your OP indicates you were fine to pay 3% but not 5%. So you want your seller to fund your decision to own two properties because you now can’t afford to.

CF behaviour. If I was your seller I would refuse out of principle.

Maybe get some legal advice as to exactly where you stand, although I doubt the full details and any exemptions have been released yet ref the second home increase of SD.

All those saying the OP should have known it was coming you have also been saying do not speculate and wait for the budget!

Ok so very simply the current home is your main residence. You need to dispose of this (gift to your parents) and then your new property purchase will be you main residence.
Speak to your conveyancing solicitor and arrage a transfer of ownership on you current ownership in parents home.

😂

They could. Also, the OP says her parents have given her some money for her onward purchase, so they obviously have some money, and I'm guessing they could give her a lot more than £1 for her share of the house.

The OP likely wants to keep it for IHT reasons though.

Ok another option if you are wanting some money from your parents for what you've put into the house, is to look into a lifetime mortage for them (equity release) for them to buy you out. The interest for them will roll up so less will be avaiable to be inherited inthe future but enables you to have some or all of you money now. Also if they end up in care int he future won't be much if anything left anyway. You need some specialised advice.

Personally, I would say 'no'. However, I also don't think the immediate, less than 24 hours notice start is reasonable for those already in cahins.

However, if you are going to put this forward, work out your sums, so you won't be considered a CF, and have more chance of them saying yes.

Looking at the gov.uk online calculator, currently (as in pre-budget), if you were buying a second property at £200k, you'd be paying stamp duty of £6k. As of tomorrow, that would be £10k (an additional £4k).
You ask your vendor to meet you in the middle and reduce the price to £198k. However, you are now only paying SDLT on £198k, and not £200k. Meaning the SDLT is now £9,900 (not the original £10,000). So, your vendor is out of pocket by an additional £2000, and yet you are only out of pocket by £1900.

Obviously, you would need to work out your own sums, based on what you are paying for the property, but if you do ask, don't just ask for a 50/50 split off the additional costs taken off (that's not your vendor's issue anyway!), as if your vendors kindly agree, you'd almost be making the double saving.

Yep if the mortgage is paid off come off your parent’s deeds asap.

The problem is that the house isn't worth less because you have to pay more in taxes, OP. Especially because it's a 'second home' for you, even though your parents living in your first home.

I'm sorry, but it's really not the Seller's problem to solve for you or to accept less than their house is worth ... money they likely need for their position in the chain!