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.

@Tupster. You really think one person can bring down the whole UK market?
That's paranoid thinking!

😂😂😂 It's definitely not ME who's got that delusion!

Trust me @Tupster. I'm not that stupid.

If they can afford a second home they can afford £10,000. If not, then they shouldn’t be buying a second home and they should definitely not expect other innocent parties to fund it for them!

How do you not know if the are just trying it on so they don’t have to pay the hike themselves? Or they may have planned this all along? preying on older sellers because they believe they are ‘loaded boomers so they can afford to take a hit and pay towards my tax hike’

Anyone expecting others in the chain to fund their tax hike when the whole nation knew labour said:
‘it is going to get worse before it gets better’ and that Labour do not agree with second home ownership unless you pay for the privilege, knew there could be financial implications in house transactions so should have budgeted for this when they offered on the house they were buying or they should have purchased a lower price property to cover any unexpected tax hikes.

I would put this whole situation in the same boat as a seller asking you to pay more before exchange or they will sell to a higher bidder. So gazumping, or a buyer who demands a discount before exchange because they can’t afford the extension they wanted.
Same thing different circumstances.

Owning a second home is a luxury. Fact. I agree that it’s not nice for someone, in a fortunate enough position to be able to purchase a second home, to have to pay this hike, but 95% of posters on here agree that it is not right to expect innocent parties to pay their tax hike and I am surprised that anyone would agree otherwise!

This 👆👏

And none of them understanding that their 'short term' 2nd home stamp duty could be refunded if they sell their 1st property within 3 years. If it is short term that is.

I think they do understand that point because they are not FTBs who may not have been following property- related news up to now.

They are buying a second house so presumably were well aware of the possibility of Labour increasing taxes on second homes. Additional taxes are never welcome (& this one would have been kinder if there had been more notice) but this is a time when many FTBs are struggling to buy their FIRST property so I’ll reserve my sympathy for them.

It’s an inconvenience for second home buyers but if they’re struggling that much they can sell the first property within 3 years to get a refund, as you say.

There used to be many more people talking the market down on Mumsnet but some got banned & others disappeared around the time Mumsnet changed the rules re people only being able to post on a thread using one username.

The house you are buying has just gone up by £10 000. If that is more than you would have offered for it then you should ask for a reduction. Obviously, the seller might disagree or pull out and that is up to them. It isn’t your fault or the seller’s fault that the price has changed and it is pretty obvious that people will want to renegotiate. When does the stamp duty increase come into effect? Can you negotiate for the sale to go through before then?

The stamp duty on second homes went up overnight @Diomi so there’s no avoiding it now (apart from withdrawing from the purchase if contracts haven’t yet been exchanged).

In that case a lot of people will be put in a position where they have to renegotiate.

Or at least try to renegotiate, because as has been expressed on this thread, not every Seller would be willing to do so since they could theoretically sell to someone else who isn’t buying it as a second home.

You're purchasing a second home through choice- the initial tone of your post was a tad more woe is me but you are choosing to have multiple properties and that's now coming with a financial cost.

That is true but then they risk being stuck in a chain. Or it could just sit on the market and who knows if house prices will go up or down? A lot of people renegotiate after the survey anyway.

Renegotiating after a survey is different because a survey can reveal problems not apparent from a quick visual inspection of the property by the potential buyer.

Agree that some sellers would be willing to negotiate re changes to stamp duty in order to keep the chain intact but not all sellers would be willing to do so.

Yep, selling into a weakening market. 5 to 10k on a 500k house is not a lot, and not worth the risk of owning a home you don’t want for a further 3 to 6 months.

This is essentially blackmail we are talking about here. Threaten the seller with dropping out to get a price reduction for something that is absolutely nothing to do with their property. I simply do not believe that any of these supposedly desperate second home buyers are ACTUALLY in a position where they have to drop out - they are just greedy and entitled. Sellers have absolutely no need to agree to anything "to keep the chain intact" because that chain is going nowhere if you stand up to the bullies.

@Diomi you see I feel like this- whilst it's bloody annoying my FIL was lucky to even get a quick offer- it's not a thrilling area, it's a dying place and his gaff needs work - to be honest I didn't think he would get what he did and he wants out asap at 85. All sellers situations are different. His buyers aren't loaded either, they were keeping the other house for a while so as to avoid a chain - it's not a second home as such- ( ie holiday home)

Nope, but even though mumsnet posters aren’t online influencers, mumsnet is!

Mumsnet in numbers

• Over 8 million user posts per year
• 1.2 billion page views per year
• 23 million visits per month
• 8 million unique visitors per month
• 9.26 minutes average dwell time
• 75% of users in full-time or part-time employment
• 78% of users are aged between 26-45
• 91% of users have children

Yep, a form of blackmail and bullying tactics is exactly what it is.
The second property owners will have the same issue with another seller if they pull out themselves and cause the chain to collapse, they too need to sell their second property, so either way they will have to find the money somehow, they are just trying it on.

Hopefully naive sellers buying their residential home won’t fall for it. I wouldn’t.

And they are probably using multiple new usernames as we speak as how can mumsnet keep tabs on it if people post from iphones.
Mind you, it’s very easy to spot them.

Crikeyalmighty

Considering this may cost your own 85 year old FIL money, you are being extremely defensive towards the ‘poor’ second home buyer. 🤔

Agree and if they are only keeping the second home for a while to prevent a chain, they will claim the extra stamp duty back. He really should just say "NO" to any request for reduction and I bet they won't drop out.

I am also questioning why Crikeyalmighty is SO headstrong in favour of the second home buyer with the continuous posts, yet it is their 85 year old FIL who is being the target of this callous buyer who is clearly tying it on. Very odd

Because my FIL desparately needs to move asap for all kinds of pragmatic reasons and because their is a big chance his house will drop a fair bit . It isn't sensible for him to hang on 6 months for another buyer etc ideally for reasons I'm not going into and lose a place that is perfect for him - he has a perfect forward place to move to and paid £70k less than he was expecting to have to go up to.. Do I agree with them possibly not coughing up - not really no - but given that it's not a couple with pots of money buying a holiday home etc , but a family stretching themselves I don't hold with the cutting off your nose to spite your face method either that you seem very keen on . Far better to be pragmatic and split the difference -