To not pay buyer's SDLT

[southmove]

I know this may be an emotive one, given how many buyers are on tenterhooks at the moment wondering whether they’ll be paying the extra stamp duty bill.

Would like some objective opinion on what is reasonable in this situation.

We are a large family wanting more space. We saw a bigger house for sale a street away and put our house on the market at the beginning of April, but sadly missed out.

We were unsure whether to keep our house on the market knowing we’d miss the stamp duty holiday and hadn’t found a property to go to. The estate agent encouraged us to keep it on, we’d be in a stronger position if we’ve sold, etc.

We got an offer from a cash buyer about a week into May. We explained our reservations, they put in a final offer which we accepted. This offer is 1% higher than a neighbour's structurally identical house with similar garden sold for a year ago. We thought this was a fair price.

Fast forward we are in a position where our solicitor is so snowed under with work (when we do hear he’s getting back to us at 3 am!) because of this deadline. We’ve used him before and he’s very conscientious. He says completion should be possible in time. It’s a stressful waiting game.

The buyers paid their solicitor extra for a service to expedite the process from their end. And from their point of view it is a cash purchase and should be done in time.

The estate agents are saying the buyers will reduce the offer if it looks like it won’t complete in time, effectively asking us to cover at least part of their stamp duty. Is this reasonable?

We will have a hefty tax bill ourselves on our eventual purchase and can do without paying someone else’s too. Plus we are paying for rental, two removals and early mortgage repayment charge to enable the sale.

The buyer came to the process late, according to the government the extension was to allow for those who were already in progress in March to be done in time.

Is the buyer being unreasonable or would we be if we refuse to concede on the price? Of course we may have to as we don’t really want to lose the sale as we have already paid deposits going forward, but the buyer stamp duty costs would likely be more..

Just hoping it will complete in time!

They can ask for a reduction but you don’t have to accept it. If you have no house to purchase why not just put it back on the market if they don’t stick with their purchase price?

Sorry - just to add we have put down a deposit for a new build so we are tied down with that

Would you be confident that it would sell again quickly if they pulled out? And for the same amount as before?

Tbh putting an offer in in May and expecting it to be complete by June even in normal times is complete madness. Let alone when you know lawyers etc are gonna be super busy.

As others have said they can reduce the offer if they like but it's your choice to accept it or not. There may be a half way house like offering the 50%. It's also not a total cut off at the end if June as its tapered to Sept to be fair

Is it solely your solicitor causing the delay?

An offer in the first week of May to complete by the end of June was ambitious but for a cash sale, possible, even with the delays. And they’ve paid extra their side to make sure that the heavy workload of solicitors won’t impact on them... which makes 8 weeks seem more reasonable.

I’d expect them to ask you to cover the SDLT if the delay is solely your solicitor. If it’s something outside of everyone’s control, like searches, I’d expect them to live with it...

Like others have said, them asking doesn’t mean you have to accept. You can relist. How is the market where you are now? Some places seem to still be moving; others are much slower.

Everyone is snowed under. My employers have been sending out “no guarantee” letters since the start of April.

They are being completely unrealistic to complete in that timescale.

Although I dealt with a file yesterday with the clients expecting similar timescales to your buyers.

I wouldn't expect you to help cover the stamp duty loss. It's not your problem.

But if your house is selling for only 1% more than a similar house last year, they are probably already getting a bargain, what with the massive price rises everywhere.

It looks like the sale of my flat may go past the deadline but I've made it absolutely clear to my buyer that I won't be paying her stamp duty - I am paying my own stamp, I'm not paying hers as well!

But I guess the difference is that I haven't found anywhere to buy so I don't feel the pressure to sell (I'll have to move into temporary accommodation).

Maybe offer to meet in the middle?

I see their point, but it was far too ambitious in the first place to assume that the sale would have gone through before the end of June.

We have a family (probate) house going through the moment that started at Easter and still has not completed yet due to all the delays in the system.

I have purchased a piece of land historically with absolutely no chain just a straight transaction that took 12 weeks.

Sadly they are not being realistic and perhaps their own solicitor should have explained this to them. But obviously I can see that being this close it causes undue stress all round.

How quickly would ours sell? It's a difficult one - it only took a month to get this offer but a month might be too long to hold down our purchase. Another slightly smaller house nearby has since sold very quickly - the guide price was 5k more than we accepted at (i assume the sellers obtained close to asking price unless they wanted a quick sale).

The amount to cover if we go into July is 12K. I don't know how much the buyer is thinking of reducing their offer by though. We have put down a deposit on our new place but it's nowhere close to that, although we don't want to miss out on the house.

We got an offer from a cash buyer about a week into May. We explained our reservations, they put in a final offer which we accepted. This offer is 1% higher than a neighbour's structurally identical house with similar garden sold for a year ago. We thought this was a fair price.

In a year, prices have risen approx 10%, possibly twice that or more if you're a detached house with garden in a desirable area.

You are massively under selling your house and the agent gave such poor advice on that as to be (IMO) courting professional negligence and in breach of their own code of conduct.

This agent wants their commission, quick and easy, one in the hand over 2 in the bush, nothing more. I would withdraw on the basis of the buyer's cheeky revised offer, and push back in the strongest terms on any attempt from the agent to recover their commission on both the basis of an effective withdrawal of the original offer and also the agent's advice to sell at early 2020 prices.

Do not use them again.

If you are in a desirable area and a house rather than a flat they are selling very quickly , the price this year seems to be constantly rising as the demand for it is still very strong with not many coming onto the market
The increase is 10% or more this year not 1%

The solicitor isn't doing you a favour you're paying for a service, whatever time he delivers at!

I am in a similar situation however the delay has been with the buyer’s solicitor. We sent documents in early April which he only raised enquiries on last week and then told our buyer it was our fault and he had only just received them (confident our solicitor sent them on immediately as have seen her emails and she is amazingly efficient!). Our EA said he’s seeing this a lot with solicitors claiming they haven’t received things on time to cover the fact they are being so slow having taken on more work than they can manage.

You don’t say that their offer was on condition of completing before the deadline. If not, then I don’t see why you should pay their Sdlt.

[Press post too soon!]

Buyer is now asking us to stump up for the fact they are likely to lose out on the stamp duty saving. I am worried about them walking away and unfortunately our house took way longer to sell than we had hoped.

1% increase does sound low but also a month sounds like a long time to get an offer in the current climate? There is no rule on this... it all depends on how much either party wants the sale/purchase and a matter of negotiation.

Surely they will realise that if you don’t reduce the price you’ve all previously agreed and they withdraw from this sale, they will still have to pay SD on the next house they decide to buy.
Their solicitor should have warned them about the tight timescales under normal circumstances with the added deadline putting pressure across the house buying industry.
Hopefully they will come to their senses and appreciate that there is nothing you can do other than what you are already doing, with your solicitor burning the midnight oil too, to meet that deadline.
Managing their expectations is not your responsibility.

If they didn't budget for the sdlt when making an offer in May, that's their problem, not yours.

I have no sympathy with anyone who expected to benefit who only out in offers after the extension.

I made an offer in a house in May. I made it clear that it needed to be chain free (and the house was advertised as such), and that I was close to exchange and completion on my house, making me a cash buyer, and would really like to try and complete by end of June. It was a best and final bid situation. All fine and accepted.
I got my searches requested, survey booked immediately. My lawyer was on the ball looked up land registry for any questions about boundaries, we got the drains and environmental back quickly so she told me to ask the surveyor to look out for a couple things. All fine.
Since then diddly squat from seller. My lawyer requested draft contracts May 18, June 1 and earlier this week. Nothing. She has now been told the solicitor has gone in holiday!!!! The E A is on holiday too - monumental poor timing.
My solicitor says that if she had received the draft contract and property info forms back in a timely manner we would be very close now. So whose fault is it that I will now most likely miss the stamp duty date?
There were a couple issues on the survey I was willing to overlook to keep things moving. If I miss the deadline, I'm going to ask for money off because of them.

I agree that you may be able to get a better price for your home, it sounds like your buyers are getting a bargain. Either way though, it's not ethically or legally your responsibility to complete within the stamp duty deadline. The buyers should realise that if you decline their suggestion they will be starting again, with another couple of months of property inflation. Tbh I'm surprised that you seem to think that 1% above last year's prices is fair. You may be able to get a better offer and still make your deadline for the new build.

it only took a month to get this offer but a month might be too long to hold down our purchase.

A month seems like a long time in the market we've had - but where I am, properties have been on for days at most. Is it the same where you are?

It's now about a week or so for properties to move here, probably 2x slower than it was at the peak. That's not an exact science, but you could gauge similar for where you currently are, to see if you've got enough time to relist.

On the one hand, 1% over what a house sold for the year before makes it seem like you've really undersold your house, or the people before were punching... but a month to sell undermines that quite a lot.

I suppose you have to see if they ask, and then try to negotiate. It might be worth finding out what leeway you've got with the new build first.

They put in an offer in May and expect to compete in June? Is that a miss-type? They're bonkers! I mean perhaps if the chain had been complete in February they'd have a reason to be chippy with you. Presumably they realise that they also won't be able to buy anywhere else before end of June neither?! Honestly I'd tell them to job on. But I'm particularly stubborn and it's not my house.

They chose to offer on a property with only 7-8 weeks before the stamp duty holiday deadline. They took a chance and must have been well aware that they might not make end of June. Anyone offering after the extension should have been aware of this strong possibility. I wouldn't agree to pay their stamp duty on this basis. It's worth discussing with the agent and letting the buyers know that you will not be covering their stamp duty so that they know where they stand. The sooner you put it back on the market if they are no longer interested on this basis.
Also, as others have pointed out a 1% increase in a year seems very low when the average gains this last year have been >10% nationally.

Thank you, that's been a lot of food for thought. It looks like there has been a bit of movement today with the solicitor, so I hope it won't come to a negotiation. Given the 1% increase on our neighbour's sale i feel we have a good case for not reducing the price further if the buyer demands it. It's not as if the price was inflated because of the stamp duty holiday so they can't claim that. And it was may, 10th to be exact.

Houses have been selling pretty quickly here but I don't think a month is too unusual in our local area.