What would you do? New Stamp Duty Rules

[Sammyjoegreen]

Hello All,

Thank you in advance for reading and any responses.
So I am sure we all have heard about the impact of the new national budget on stamp duty. I am in the process of purchasing a house for myself and my toddler which I was hoping to make our forever home. However, following yesterday's budget we're now facing almost 40K in stamp duty charges as I am not a first time buyer.
Could we still afford it? Yes but it means we won't be able to tackle any refurbishment work the house requires for a while and these are essential as I have a small child.
I am considering the following options:
Option 1. asking the seller if they might consider deducting the additional stamp duty from the purchase price or at least a portion of it. I feel bad about doing this as they have already had a previous transaction on the same house which was near completion fall through for financial reasons on the side of the buyer. They are selling as they need to downside following partner's passing
Option 2. Look for a cheaper property but I've already paid for a survey and part of the legal fees for this one. Also, there really isn't anything that is considerably cheaper in the area that would make any significant difference. Average price is about 550K. I'd have to look at moving to a completely different area far away from family.
Option 3. Continue the current transaction and save till I can afford the refurbishment work.

Help please! What would you do or are there any other options you could suggest?
Thank you.

Honestly?
if I was the seller in option 1 , I would pull out even if I ‘cut my nose to spite my face’ …… if you asked me this

I don’t think there is anything wrong with asking

The problem that you have is your seller also has to pay more stamp duty for their new property, so if you decrease your offer as well, it's a double blow to them.

Such a tricky situation, I imagine housing chains across the UK are stalling/breaking this week because of this.

The seller is selling for a reason: move house to buy a house, needs cash etc. I wouldn’t sell to you.

I think you may be confused. It shouldn't matter that you are not a first-time buyer; the additional charge is only relevant if this will be your second/additional home?

We're selling our current home in order to move into a new home; completion for both properties will be done on the same day. Our stamp duty charge is exactly the same.

If you’re paying £40k are you buying a million quid house? While I would be frustrated in a similar situation, it is quite my diamond shoes are too tight tbh.

Such a tricky situation, I imagine housing chains across the UK are stalling/breaking this week because of this.

which is why it’s worth asking & the sellers can also ask. If they have to re list there is no guarantee they will get the same price.

Are you buying a second home? (Or a £££££ home?)

This - stamp duty only increased for 2nd homes:

Stamp duty: What is it, how much is it and how is it changing? - BBC News

@WoodsTreesWhere no it's just over 500K, it's because i am not a first time buyer

I've just been on the government SDLT calculator, it's £12.5K https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#!/result

I think if I am reading this correctly your threshold doesn't go up until March 2025.

Yep, this @Sammyjoegreen

Will you then own two homes?

Being a first time buyer is different to buying a second home.

@TokyoSushi it's because I am not a first time buyer. My mum and sister will remain in my flat where we're living now. If I sell it, they will have to move into some rented accommodation.

So you are buying a second home..?

talk to your solicitor - there was another thread two days ago about this and I believe that if it is to be your main home then you don’t need to pay the increased SDLT however that will change the capital gains implications on the flat.

if it does transpire you need to pay the extra £40k then perhaps ask your Mum and Sister to help out with it, or just save the money to do the reno’s later but I wouldn’t be asking the seller to cover it - that’s pretty cheeky

OP, forgive me if I'm confused with this, but the reason your tax has gone up is because you will own a second home, hence that additional tax. It's nothing to do with not being a first time buyer. It may be cheaper to sell your first home within 3 years and then you can claim back the tax.

That’s different to not being a first time buyer - you’re purchasing a second property. Can your mum and sister not contribute seeing as they’re benefiting from your flat? Or remortgage to release some capital.

So you are buying a second home... in which case increased stamp duty will apply.

I would ask your mum and sister to help with the increased fees because if you could sell the flat you wouldn't be paying so much stamp duty.
The idea is if you can afford a second home, you can afford higher stamp duty.

If you can't, which is the situation you are in, either sell the first house or lower your expectations on what you can afford.

I would wait until the new year to find a property in your area at a budget you can afford.

Oh I see, yes if it's a second home (nothing to do with no being a first time buyer) then yes, it's very expensive. That's not your sellers fault though, it's of no benefit of them to contribute.

Isn't this only if it's a second / additional home? Unless I've misunderstood? We're buying a house, not first time buyers, and I haven't heard anything about an increase in stamp duties.

This is wrong I think.

Bought a second home which is my main residence and still paid second home stamp duty, otherwise everyone would just have the first home as their "second home" for a period to save the huge amount of additional tax!

I retract my post, I didn’t realise this was just for 2nd properties & what you were buying was a 2nd property.

@Mostlyoblivious thank you for your response. Yes it's a second home as my flat is now too small for us all. Thank you for your suggestion, I will speak to my solicitor.

The 2% stamp duty increase is because you are buying a second property as others have said, nothing to do with not being a first time buyer.
Can you borrow against your current flat (eg remortgage) to fund the increase perhaps?
On a 500k property the INCREASE of 2% will be ~£10k? so that's what you're trying to fund here - the rest of the stamp duty is the same as it was before so something you should have factored in already.