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!

Have you called your solicitor and offered him or her more money to turn around as fast as possible? That is what I would try, an incentive on the solicitor (assuming they can do this within Law Society guidance etc)

Why should OP’s solicitor prioritise her transaction over their many others which want to complete by the end of June @Sunnyfreezesushi?

@MinnieMountain- because that is apparently what her buyers are doing to expedite matters. If she really wants the deal to go through no harm in trying surely. I am
sure plenty of people are doing this. Some solicitors can hire consultants you know to speed up matters...

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

I would pull out. Thats insanity. Especially in a slow market where houses stay on for a month. Hardly the couple of days market where no chain cash buyers are king.

I wouldn't be paying for part of their stamp duty. Surely your buyer must have known that completion after end of June was a realistic possibility when they made the offer on 10/5.

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.

Oh sorry I see you do have a house to go to. Just say no.

I’d want to know what still needs to happen on your transaction. Your solicitor has relatively little to do as you’re selling, he just needs to answer enquiries, agree the contract papers and get a redemption statement.

If your buyer’s solicitor is on top of his end it ought to be capable of going through.

The offer was only accepted 10/05. Totally unreasonable to expect you to pay stamp duty. It would be a miracle to get it through before.

It sounds like the buyer is warming you up for a negotiation if you unfortunately miss the deadline. They would’ve been foolish to pay out for a solicitor and surveys so late if the stamp duty was make-or-break for them, so they are probably looking to soften the blow. I guess you just need to decide to what extent you are willing to negotiate (if at all) - would you take a hit of say £6k to avoid another round of viewings, solicitors, etc.? You’ve a couple of weeks to work out to work out whatever your figure is, whilst the pressure is off, and hopefully it never comes to that.

Nobody should have been putting offers in on houses in May expecting to make the deadline, the deadline was extended to ensure the sales agreed prior to the extension could go through after unprecedented delays. Anyone who started and completes a purchase April-June are extremely lucky, but any offers put in should have been done so with the expectation (and budget) of the tax being paid.

I would not relent at all, but then I suppose it depends on how the negotiation went at the start and whether they explicitly stated their offer only stood if the deadline was made. If you didn't agree to that, I wouldn't agree to it now.

So, buyer has put in a revised offer and wants us to cover the full increase in their stamp duty! Citing again the delays caused by our solicitor.

Apparently now the buyer's solicitor has told them they won't be able to complete in time 🥺

We've told the EA no way is that happening, and are mulling over a counteroffer.

Looking back at our correspondence with the EA at the time of accepting the offer we did make it clear that our solicitor had told us it should be possible to complete in time but could not be guaranteed because of bottlenecks in the system.

That would be a no from me and there would be no counter offer. They choose to take the risk. You shouldn't be paying extra because they chose to take a risk. I bet they won't pull out if you say no anyway.

I made my offer dependant on completion in time for SD holiday. In my case, if it was your solicitors preventing that, then yes I’d ask for a reduction. So I think it depends on whether your buyers did the same.

They’re not even trying to be reasonable about negotiating. I half suspect that the buyers were planning to do this from the beginning - they knew they didn’t stand a cat in hell’s chance of completing before the deadline given how busy everything is, but they’ve put in this song and dance to butter you up so that you take on the stamp duty. Whilst it’s easy for me to say this without having skin in the game, I’d be tempted to go back onto market - you’ve wasted enough time on them already.

My buyers made their offer conditional on meeting thr stamp duty deadline (June). In the end they lost their own buyer so it was their fault we missed the deadline. They were still keen (desperate in fact!) to go ahead and didn't ask for a price reduction, but they couldn't get a replacement buyer so we got new buyers ourselves. But basically, I think they realised that house prices have risen so much that they were still getting the best deal they were going to find, regardless of SD. It depends entirely on how confident you are thet they won't pull out though, and how much you need this sale. Negotiating is a bit of a gamble.

Our buyer (cash investor) also made clear that offer was dependent on meeting SDLT deadline. This was start of April and we knew it would be touch and go but highlighted to our solicitor from the start that it was imperative it completed by end of June and did everything in our power to speed things up. We made it and complete this week. If they hadn't made it clear that offer was wholly based on SDLT deadline then I certainly wouldn't have considered a reduction at this stage. Is your solicitor saying they think you can still make the deadline? How long do you need between exchange and completion for example?

If they were going to make this a condition of the sale, that should have been made clear to you right at the start as part of the price negotiations- this much if we get it done in time, this much if not. If they didn't, then unless it would wreck my onward purchase, I wouldn't even consider a reduction.
What this all shows very clearly is that the whole stamp duty reduction was a waste of government money- they forwent tax we need for public services and for recovering from covid and all it did was put prices up by that amount, and make the market a rushed mess, with prices going up even further because of the rush- I'm sure some people will have made unwise decisions about price and have taken risks they should have investigated more fully because they felt pushed by this imposed deadline. There are enough deadlines in house buying and selling as it is.

@Chailatteplease

I made my offer dependant on completion in time for SD holiday. In my case, if it was your solicitors preventing that, then yes I’d ask for a reduction. So I think it depends on whether your buyers did the same.

These buyers made their offer on 10th May. They were well aware that there was a high possibility that they might not make the deadline. If they had made the offer in December and the OP's solicitors had really caused delays I would have some sympathy. These buyers knowingly made a risky decision and are now trying to get someone else to pay for their risky decision. I would re-market the house @southmove

Don't counter offer. They can't make the stamp duty saving on another house anyway. And prices have gone up.

If they pull out it will cost them money.

The timescales would never really have worked so close to the deadline.

I can't help but feel they are calling your bluff as if they pull out they start again on another purchase with additional costs plus the stamp duty anyway. If they progress with you and they miss the deadline then they have the stamp duty costs but not additional new fees for another property.

I would be tempted to stand firm. I can't help but think it is cheeky in the extreme expecting you to pay their stamp duty costs plus your own for a timescale that was not realistic in the first place.

Relieved to see that everyone feels that making an offer in May and expecting completion in June is unreasonable! Have just this morning received a text from our buyer that they want to complete by the deadline. They made their offer on 7th May and knew we needed to find a house to move into. We made an offer on the house we are buying on the 17th May so not a huge gap and have submitted all paperwork etc swiftly. We have never expected to meet the deadline and assumed our buyers were the same as the deadline was never mentioned until today. Am going to ask our EA to manage the buyers expectations.

They are deluded and unreasonable. Even in a normal year it would be unlikely to make it all happen in those timescales. Nigh on impossible at the moment

The buyers made their offer on 10th May. It's not even been 6 weeks. That was ridiculous even without the Stamp Duty Holiday rush and resulting chaos of the housing market. No chance!

They are having a laugh. My answer would be "No." No counter offer.

@ArchbishopOfBanterbury

The buyers made their offer on 10th May. It's not even been 6 weeks. That was ridiculous even without the Stamp Duty Holiday rush and resulting chaos of the housing market. No chance!

They are having a laugh. My answer would be "No." No counter offer.

Totally agree with this - I'd say no to any reduction. If they want the house they will proceed regardless. Tell the agent to look to re market.