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.

It's called equity release, your name would come off the house as part of it as you'd be too young for equity release. The easiest solution is just for you to borrow more on the mortgage for the new house and just suck it up as an extra cost.

They put it in their will the house is yours and ring-fence that £100k for you.

Not even a 1 bed flat? Surely that's all they need.

You put £75K into your parents house and that has doubled in value, you will also presumably inherit the property tax free in the future. If I was your seller I wouldn’t agree to subsidise your stamp duty just because you already have money invested in another property.

If you are really stuck could you not take out a loan against the equity you have in your parents house?

I know most people are saying they wouldn't. But your seller might well do so if it's that or have the chain collapse. It depends how committed they are to their purchase I imagine.

That would effect how much she could then borrow on her new mortgage, not a good idea and would take a while to go through. Plus they'd have to apply with her which would further complicate it as they own the house too. She needs to just borrow the extra required on the new house if possible.

No, of course not. It’s also my understanding that you can’t pay stamp duty out of your mortgage so just increasing that won’t work.

You borrow the extra you need to buy the house not for a specific purpose, the funds you then keep back on top of your deposit then pays for stamp duty etc. You're not borrowing to pay for stamp duty. I.e borrow more/lesser deposit to pay for specific other costs.

Just find another reason to ask them to reduce the price for. Doesn't have to be for stamp duty. The survey will have a number of issues on it I expect, pick one and negotiate on that.

But your parents could leave it to you in your will or can write a loan agreement that states you've loaned them 100k and this is repayable on their death or something to that effect.
Just remove yourself from the deeds

I don't understand why you wouldn't have done this in the first place? Unless there is a back story with your parents? Do they pay you rent or something?

Then you could do it much lower stamp duty and save loads.

Crass is putting it rather politely.

There’s clearly something OP isn’t telling us. She hasn’t said why she doesn’t want to take her name off the deeds, despite many people asking her.

Exactly 😂 I hate to say it but the people I know who did this, didn't do it as a selfless gesture, it was a calculated investment agreed by all parties and usually the decided outcome is that their offspring will eventually inherit the house anyway. It's a great investment! Also doesn't owning part of a share of property (morgage free?) help elegabiliy on a mortgage in the first place? Its a bit like having a Virginia Ham under your arm and crying because you have no bread to eat it with!

Basically your parents owe you £100k. That's why you can't afford a house. Not really to do with increase in stamp duty. IMHO. which you wouldn't be paying anyway if you didn't own a share in your parents house. The £100k is doing you no good at all. You can't access it. Your parents need to buy you out or you need to draw up a loan agreement.

You want the vendor of a house that you're buying to give you £10k because your parents have a poor credit rating?

Of course you can explain your situation and ask. It entirely depends on the circumstances of the seller as to whether they will entertain it. Just be prepared to lose the house

Could it be you don't want to come off the deeds because you risk losing the money in case they go into a care home?!

(Clutching at straws here....)

Sounds like you want it all ways.

That has crossed my mind as I'd be losing everything, if I just removed myself from the deeds.

This looks like some kind of tax avoidance to me.
Your parents are gifting you money yet they only have small pension and state pension? How small? I assume you mean to go towards the deposit. For the 2% stamp duty increase to be 10k difference we're not talking a cheap house.
No
Sorry
I wouldn't

This is peoples homes you are talking about, they may not want to move to a 1 bed flat, it is not up to you to say what size of property people need.

It's up yo her though, she helped them and now it's their turn to sacrifice.

@Ouch12 Just renegotiate the LTV on the mortgage - 10k is not going to make a huge difference hopefully. You put down £10k less as a deposit, then you will have the £10k to pay the extra stamp duty.

That's gutting for you, OP, I'm sorry 😥

To be honest, if you cannot find the money, there is no harm in asking.

If they are invested in selling, they may be willing to take a small decrease rather than lose you as a buyer.

People on Mumsnet are very ardent about these things, but in real life, the market may unsettle because of this and your sellers may just want to secure you.