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.

I agree. There are a lot of quite aggressive replies to @Ouch12
The thing is, if you were really a seller about to exchange on a sale and purchase, you wouldn't want to start from the beginning again. Obviously, you have the option to just put the house back on the market and are absolutely free to do this. However, a lot of posters seem to be assuming they would get a better offer easily. That might not be the case as a lot of sellers are finding that they are having very little interest and needing to reduce at present. If it were 2021 and a buyer tried to renegotiate, you could easily put it back on the market and find another buyer within a week. The situation is very different now in most places. They may not get an offer for a long time or get a lower offer. The seller would need to weigh all this up.
Try to raise the money if you can or negotiate and compromise. 10k isn't a massive amount of money if the house in question is 450k or so.

I don't know the exact ins and outs of this in regards to what would happen if your parents went in a care home. But it sounds like what would be better is if you had a charge on their property rather than you being a joint owner. Then your investment in it would be safe but you would be more akin to a mortgage lender to your parents..

The most realistic response! Op, if by you dropping out of the sale means that the seller, plus whoever else in the chain loses out on legal costs that they’ve spent so far, plus the whole chain collapsing and ending up back at square one, then accepting a £5k decrease isn’t unreasonable, especially as it’s due to an unexpected law being pushed through at short notice.

it doesn’t hurt to put it forward to the seller. I know what I’d rather do in this situation.

There are sacrifices and sacrifices - making older parents move out of no doubt a loved home for the sake of £10k seems OTT to me.

Have you already negotiated price at all OP? Either offering below asking price or negotiating with the surgery results. If you have already lowered the price, I don’t think you have any wiggle room and you could risk pissing your sellers off to the point they won’t even entertain selling to you.

My answer on that there is wiggle room is contingent on you agreeing to pay asking price.

Selling a house is a negotiation. You can ask. They might be so desperate for that particular house in that particular area they will agree. But equally, be prepared for them to say no and end the transaction.

I might be dumb but why would your house be considered a second home
Your second home would be your parents house in my opinion. Your main residence would be where you live the majority of the time.

This indeed

She already owns one home, thus the one she is buying now is her second.

Two hours to get everything sorted, with no prior notice? Of course that can't happen.

Councils are looking very closely at doubling council tax on second homes. This is a problem that won't go away

Because she's buying a second house...

Yes exactly. This suggestion is totally unrealistic. The chain would obviously collapse anyway as it would take many months as a minimum to sell their house.

Exactly this. I’m in the industry and we’re a little shell shocked at work that it’s been brought in immediately - not even a small transition period to, say, end of December. A lot of businesses have been bent right over by this budget and it will have a knock on effect on others.

OP - it doesn’t harm to gently broach the subject with the sellers. Some will be reasonable and if they’re in a strong position they may agree a small or partial reduction. If this isn’t possible you could try and raise the additional sum needed on the existing parental property - though there’s a risk here as your mortgage lender may out this back to offer stage and reassess affordability. If there’s a long time left to run on your existing mortgage it may not be too much of an increase?

If you can exchange tomorrow there’s reference on the gov website that there may be a transitional rate applied - for contracts substantially performed (last time this happened was June 2020 and the ‘substantial’ point was deemed to be exchange of contracts).though it’s all very muddy and unclear, this point has not been confirmed yet. This is in England only. Scotland and Wales will differ.

Good luck.

This is a good point as the stamp duty calculator asks whether the second home is to become the main residence - it didn’t apply to the matter I was reviewing today, but it’s worth asking your property lawyer to check tomorrow when the sdlt calculator online should be updated.

You already own part of a property so you have to pay the higher SD - it will be a second property that you own so it’s on you to carry the cost. Not the seller! I can’t believe you’d ask them. If I was selling I’d tell you to take a running jump.

yiu already have a property and somewhere to live.

Worth checking, but if you are able to remove yourself from the deeds of your parents house within three years of the 2nd home purchase, you maybe able claim back the additional stamp duty you have paid.

I think you are in an unusual situation with regards to what is technically a second home, though in your case will be a residence lived in 7 days a week throughout the year.

The measure introduced today has my support, though I would prefer there to be the alternative of ending any new Air BnB style short term lets and a locals first approach in some areas. Halve the number of second homes (ones not used 52 weeks a year) and you go a way towards the number of dwellings planned by this government, albeit by proxy.

You can ask about a reduction, but be prepared for no as an answer.

You’re not giving it up. You’ll just be exposed to IHT.

Do you have a good relationship with the seller?

I would ask and explain the situation, if you are quite far down the line they might help and give you a discount. If they don’t they might risk losing you. So it depends how desperate they want the sale to go through.

Don’t ask, don’t get…. And if they say no well.. you have your answer….you’ll have to find the money somehow or choose a cheaper house.

Wrong. Effective Spring 2025.

It says 31st October on the gov.uk website.
The April 25 change is the reversion of SDLT to the usual amounts after the Tory party reduced it.

Wrong. Tomorrow 😄

I genuinely don't understand people sometimes on these threads. Chains collapse all the time because circumstances change. No-one owes anyone anything. I bought a probate property this year and dropped the offer price three times...cos our valuation came back 15 grand lower, because the survey said the roof needed immediate replacement and because the sale fell through and we accepted a low offer from someone else to keep thing moving. Each time we said - it's fine if you say no but we'll have to walk away if you do because we don't have the same money as we did before. On each occasion they said (unhappily) that they'd proceed at the lower price. In the end we got it for 30 grand less than we offered. But we totally accepted that they could say no - we just genuinely couldn't proceed if they didn't lower the price as we were pushing to our limits as it was. In any deal the power sits with the person who is happiest to walk away.