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.

But cheeky tbh, you already have a property. Not the sellers fault really.

You're buying a EXPENSIVE house £450k?
If you could afford 3% SD ,you can probably afford a 5%... Add it to the mortgage or something.

If you are on the deeds, can you raise a secured loan for £10k which they repay? Or if the mortgage is still running (it's not clear from your OP), increase it by the sum needed?

So you're not just on the deeds as guarantor, you're on the deeds because you partly own it?

In that case, the property you're purchasing now is a 2nd property and you rightly fit into the bracket of 2nd home and extra stamp duty.

It's your problem not the sellers.

You can ask, but ultimately it will come down to what impact it will have on your vendor. If they can't afford to take a price cut, they may try and pass that on to their vendor too (assuming they're buying another property).

Otherwise, they will have to have the thought of "what's the risk of saying no? How far are we along in this transaction? Do we want to go back to the start again? Is the increase in SDLT going to affect any new buyers that come in? Will we lose our onward purchase if this falls apart now?"

I'd do what you can to try and cover it entirely, but if you can't, the worst you can do is ask. If you now can't afford it, you can't afford it and ultimately it then falls on the vendor to decide what they can or can't afford themselves.

We're your parents also named in the mortgage/deeds or was it all in your name solely?

Were*

I do love the way that after a certain level ( differs for all) people think if you can afford this, you can also afford that, as if numbers reach a point where they are no longer increasing in value: 1,2,3… many

I hate cf buyers like you. Your finances are not my problem as the vendor. Re-mortgage your parents’ property, ask them for a loan, whatever. If you, a few weeks from completion, asked me to drop the price, I’d refuse the sale. The stress I’ve been under recently trying to sell a property has been awful, adding to the vendor’s stress by reducing your offer now (you’d have to speak to your mortgage provider too) would royally piss me off.

What??

I don't understand why you would have an income good enough to qualify for 2 mortgages, one of which is fully on your own, and the other is all but on your own on paper, but have so little actual money you can't find an extra 10k.

This sounds like you can afford it but you don't want to.

If you have a stake in your parents property because of financial input then surely you ARE a second home owner rather than just having your name on the deeds. Why should your seller be penalised because you can't afford a second home?

If there is no mortgage on your current house then surely you can release some equity from it to cover your £10k stamp duty.

Well, she is buying an expensive property. I can't cry too many tears that she can't suddenly find an extra £10k when she can find £15k.

So is the property you’re buying £500,000? That’s quite a lot. I guess if you’re in London it’s probably a modest flat but where I am, that would be a large family home with a big garden and parking. You could always go for something cheaper?

I would talk to your solicitor. You may not have to pay the extra stamp duty on the house as it will be your PPR. Principle primary residence. When you bought a share in your parents’ home, did you live there? If you did, you will have to sell your share within 36 months of purchasing your new home to be able to claim back the additional stamp duty, which you say isn’t possible. If you didn’t live in your parents’ home, you will have to pay capital gains tax on any profit at the time of any sale.

I have known EAs reduce their commission a little to stop a chain collapsing. Some money is better than none.

Whilst the OP's finances aren't the seller's problem, given the government have given less than 24 hours notice of this change, I don't think the OP is that unreasonable not have have £10k down the back of the sofa to pay for this. And the OP's finances are the seller's issue if they can't afford the property now and the sale collapses.

I don't think it's that unreasonable for the OP to ask - the seller can always say no and sell to someone else.

This.

If you can't find the money you'll have to tell them. You can tell them the only way you can proceed is if they drop the price. No harm in asking.

Same - sometimes all the agents involved in a chain will reduce their commission slightly to pay for something if there is a deadlock (I remember one when the agents between them paid for an indemnity policy).

You can ask, at this point in the process I'm sure they'll be open to negotiating to save the hassle and extra expense and time of remarketing it. I don't disagree with the policy itself, but do think it is very harsh to be implementing it straight away without warning.

Yes when you have large volumes of transactions, sometimes keeping the river flowing is more important than chasing every bit of flotsam.

No harm in asking. The worst that can happen is they say no?

It would depend on my circumstances - if I were desperate to sell - but probably not. I would be royally pissed off, though.

Also, you can't do that as it would be seen by the tax office as a gain, so you would have to pay capital gains as if you'd sold it for market value (or your share anyway).

Unfortunately, you've given your parents this benefit, which will eventually help you as there will be a benefit in inheritance tax that will likely offset the difference in SDLT that the raise between 3% and 5% causes. Presumably you have been watching the news over the last few months, so knew that this was on the cards, and had also factored in the 3%, so knew you would be liable somewhere.

My fag packet calculation works out that your new property is £500k to warrant a £10k increase in SDLT. Is that about right?

It would be fair to ask the vendors what you'd have given them had stamp duty been reduced. If your costs had reduced by £10k, would you have given it to the vendor?