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.

If there is now no mortgage on the property your parents live in why can't u transfer the property into your parent's names now and get them to sign a loan saying they owe you the 75K - this loan can be registered with the land registry and so you would have the protection of a mortgage secured against a property owned by your parents.

After you have completed on your house you can get your parents to take out equity release to pay you the 75K. That transaction would take a while to arrange so I can see why it can't be down before you buy your property.

I can see there may be IHT or care home fee issues if that was partially why the property was put in your joint names but the quick solution could be done within days - your parents will need their own solicitor for the transfer deed and to approve the charge. That way your seller doesn't have to pay for your family circumstances and you can sort out equity release at your leisure if you want the 75k back.

I would not reduce the price as a seller.

The tax is yours to pay...not something the seller should be subsidising for you.

Asking for a discount as you can't afford your second home?

I've heard it all now

This is very much a your problem

Did you buy your parents council house using their discount OP? Is this the reason you are locked into the co- ownership of their house?

31 March 2025. Should be enough time for you to complete.

If your circumstances have changed, which they have because of the law change, you can always ask the seller to change the price. If its a question of less money, or no deal, they may be willing to accept.

Its a free market, and considerations of who's cost it is to bear don't come into it. Its also one of many reasons why English house purchasing should be reformed so it can go through in a reasonable time - 4 weeks say, like Scotland or New Zealand - so people's circumstances are much less likely to change.

This!

this is why the stamp duty has increased because of all these people buying second homes. You will be fine when you come to sell it.

Nope, it comes into effect at midnight.

No I wouldn't be either. Your private arrangement with your parents is nothing to do with the sellers of the house you want to buy. Why are you even on the deeds of your parents house.

Sorry I see you did explain that as they were too old to get a mortgage.

You have had good advice about which property is the second home - if you follow that then you may not need to borrow more money

OP, if it's yours and your parents plan to avoid paying inheritance tax or having to sell the house to pay for their care by you being on the deeds then you may be in for a rude awakening:

https://cma-accountancy.com/understanding-gift-with-reservation-of-benefit-grob/#:~:text=GROB%20refers%20to%20a%20situation,taxable%20value%20of%20the%20estate.

They could do equity release to buy you out of their house.

The only way I'd reduce the price is if there was something in it for me. What's the benefit to the seller?

It’s not fair to ask the seller to give you the money before you’ve even asked your parents.

But you have them over a barrel so it’s sort of blackmail and in a pragmatic get the house sold sense, they may capitulate. Particularly as will likely upset the housing market for a minute.

Is the house in all your names or just yours??

It's in all our names. I have paid approx £75k into the property and it's probably gone up at least 50%.
They cannot afford to buy me out nor can downsize.
Someone suggested taking a loan on the house - so I might do that.

Many tax rises in any Budget have to become effective immediately because otherwise the market will be poisoned, one way or the other. If this rise was not to take effect for 3 months then there would be a period of intense buying activity to try and beat it.

Back when petrol tax was something that actually went up, I remember that was always announced "from 6pm this evening", so that absolutely everyone wouldn't stop off at their local Esso on their way home from work to save £1.

It gets even worse if a decrease is announced. Imagine VAT going from 20% to 18% but effective from 1 January — that's every second new car purchase in the remainder of 2024 cancelled.

its not their fault! just like you dont want to be out of pocket, neither do they!

Wow you are getting a lot of unfair comments for doing something that lots of people are having to do these days - help their parents stay in their home. It happens every day that children are going on parents mortgages to avoid them having to sell up. And we aren't talking properties worth hundreds of thousands where they can downsize and buy something else. We are talking 2 up 2 downs worth £150k. What are mum and dad going to downsize too 🤷🏼‍♀️

Yes some are going to say you have tried to swindle IHT but unless the house is worth A LOT you probably didn't have a liability anyway.

Have you exchanged on your new home? If so there are some transitional rules in place to avoid the increase tomorrow. Fingers crossed you have exchanged.

If you haven't of course you speak to the estate agent let them know what's happened and see if they can negotiate any price reduction for you.

In the meantime see how you can raise additional monies - increase your mortgage would be the most sensible if you don't have the funds. Remember if you get any secondary borrowing your mortgage company may do another credit search before completion and if they identify you have taken new credit your offer could be rescinded.

If the vendor says no and you genuinely can't raise the funds then you pull out. I think you'll be surprised once you officially tell the agent you're pulling out how much more likely the vendor will be to negotiate.

I wish you all the best and hope you get this sorted. Please don't take to heart some of the holier than thou comments you have received. Good on you for helping your parents out when they needed it!

It's the risk you took buying into their property with no exit strategy. I don't know why you say they can't downsize. I also appreciate that forcing a sale so you can get your cut is hardly likely to end in family harmony. I would also guess that you helped them out in the first place because you actually care about them, so that route is out.

So the answer is that you pay the stamp duty. Can you borrow against their property in any way to free some money up? Credit card? Moving in having spent absolutely everything is unwise as the boiler might blow the next day, so do you really have no contingency? But no, if I was the owner, I wouldn't drop the price for a second home owner. I would just find another buyer.

Just take your name off?

Downsize to what? The won't get anything around her if they sold up.
I'll look at the load thing against the property and speak to the mortgage broker.

Then I'd be giving up £100knin equity. I realise this sounds crass as I am asking the seller to reduce their asking price.