Vendor pays stamp duty?

[Jcee]

We had an offer on our house this week of full asking price but asking us to pay 2% of the £8K stamp duty as they couldn't afford it.

We can't afford to cover their costs (as we have lots of our own!) and don't feel comfortable with their suggestion as surely stamp duty is just part of buying a house and you account for it and make your offer accordingly.

So rather than enter some complex arrangement, we have suggested that we would be willing to accept an offer of 2% below the asking price and they cover their own stamp duty costs, which brings their payment to approx the same as their offer.

They have said they are not entirely happy with our proposal but will give it some thought and get back to us.

I'm really confused - am I missing something to do with the stamp duty? Why they would want to do it their way when the total costs for them work out to be the same?

Stamp duty on the house they are buying, or their agents fees, confused.com ?

Stamp duty on the house they want to buy (which is mine) - they are are not selling as they are in rented accommodation.

Sounds dodgy. Stamp duty is a tax to be paid bu the buyer and has to be declared on the SDLT form. Buyer's solicitor will send this form to them and not you. Ask them why they want to do it this way through solicitors.

Ok, sorry, I get it now. They sound unprepared and clueless, maybe put house back on the Market?

Sounds to me as though they are short of cash, but able to get a mortgage at full asking price. If they're not selling anywhere they probably only have enough cash for the deposit and not for the stamp duty as well. So they want you to pay this cash sum out of YOUR cash. You may not have instructed a solicitor yet but you may want to and ask them this as an opening question.

I am wondering, if they as ftb, feel you should make up for the soon to end government sdt holiday?

Agree its probably something to do with cashflow. Stamp duty is an upfront expense - so buyers have to have the funds to pay that. If the stamp duty is £8k, then presumably your asking price is just above the stamp duty threshold of £250k? I've seen quite a few properties at £250-275k advertised as "stamp duty paid" as its a more attractive offer for buyers than renegotiating on the price.

They might need all of their disposable cash to fund the deposit and therefore finding an extra £8k for the stamp duty is a big ask. The mortgage will be based on the selling price, but they'll still have to find the cash for the stamp duty. Say the house was £270k so stamp duty would be £8,100, even if you reduce the price by 2% (to about £264,000) they've still got to find stamp duty money at say £7900 - it doesn't make that much difference to the disposable income they have to have. If you agree to accept the offer of £270k say, but fund £2k of the stamp duty, they only have about £6k to find. Provided the bank values the house at the higher of the 2 values, it doesn;t make that much difference to them whether you agree an asking price of £264k or £270k if you see what I mean.

Yes I expect they have a cash/savings problem. Stamp duty has to be funded out of savings, whereas purchase price can be funded with mortgage. So reducing the sale price doesn't help them, because then the bank will just lend them less money.

cross posted with mandy!

Another question - surely its in your interest to get the higher price and pay the £2k stamp duty? If 2% of the asking price is more than £2k (which it is on the figures you have used) - why would you not accept this?

Thanks everyone I see the cashflow issue now - I was looking at it in a total budget sense not the cashflow needed iyswim, so I can see the attraction from their point of view

The house is on at 290K so the 2% of asking price is a drop of 5799 which is the same amount they want us to pay for their stamp duty. Sorry just realised it's not clear in my OP they want to split the stamp duty into us paying the 2% (5799) and they pay the remainder of 2900

I'm not sure how I feel about their proposal as it just seems complex and I could just imagine the headache with getting the solictors to move the money about to sort it out - not even sure how it would work to be honest.

This whole process has been a nightmare - we've had our vendors pull out on us after stringing us along for 2 months so had to find another house quickly, which we did, then our buyers suddenly pulled out at the weekend, so the house went back on the market this week and now this...I think I am craving a simple, straighforward transaction!

Sorry, I misread your original post - I read it as the buyers asking you to pay £2k rather than 2%. It therefore doesn't really make that much difference to you, but it does to the buyers. I don't think its necessarily difficult, as I said, this is an increasingly common marketing ploy (given that buyers are struggling to get good deposits together) so estate agents and solicitors are well used to dealing with the practicalities of the actual payments. Hope it goes through without any more issues.