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.

This has literally been mentioned several times by the same posters that you are criticising. Why don't you actually read the posts before commenting? 🤔

Exactly. It's an annoying situation but this is what happens sometimes. As I've said throughout, there will be a lot of renegotiation attempts now and in early April 2025 when the tax rules change. You mind not like it but this is what is and will happen. Some will compromise and proceed, some chains will fall apart.

Don't you know that you can't swap usernames on a thread? Hopefully you understand this now and stop throwing incorrect assumptions around as usual.

Exactly. Pragmatism is called for sometimes and this sounds like one of those times. Good news that he has paid a lot less for the onward purchase than he was expecting to. Good luck to him; it's not easy moving at that age.

Yeah people can’t do that anymore @Susanap so it’s more a thing that used to happen a lot but doesn’t anymore I believe.

Fgs, who have I directly accused here? I just mentioned that it is a possibility as how could mumsnet trace it if people can post from iPhones from any location?!

Anyone can log onto someone else’s computer and add a post under someone else’s name. Welcome to the year 2024!

wait for my post to get removed… 🙄
Stop trying to silence me by accusing me of throwing incorrect assumptions around just because I don’t agree with you!

@outandunder yep !! I'm very aware as is my father in law that they could claim back £25k if they sell in under 3 years- I'm under the impression though that unless they can renogatiate the mortgage amount - they don't suddenly have an extra £25k spare in their pocket making it £41k rather than 16k - maybe they can but we will see - they haven't yet pulled out.

Oooouuuuuccccchhhhh. Entitled, much?

So the seller (recently bereaved, and possibly going through this process for the first time on their own) should fund your renovations/subsidise your mum's/sister's lives?

Are you one person on this planet or is this planet of ours revolving around you?!

Your crystal ball is working overtime 🤣

Yeah yeah we know…there will be a huge property crash and the markets will collapse which will trigger a nuclear war and we are all doomed for eternity 🙄🤣 What are we all going to do????? 😱😱😱🤣🤣🤣

As much as my heart bleeds for these poor second home buyers they aren’t that poor really are they if they can afford to buy a second property for over half a million pounds, which they will then extend (this does not come cheap!) Plus rent out their second home for 18 months whilst they refurbish the gaff that needs work but on the other hand doesn’t need much work and is just a bit dated. Oh and ‘apparently’ they didn’t even know that it was going to be their second property, even though by purchasing 2 houses would mean that they own 2 properties.

They don’t have an extra £25.000
spare but they have money to extend 🤔

I would say that not only are these buyers trying it on but they sound like property developers/investors to me!

"...making it £41k rather than 16k"

OK, I'm confused by these numbers. If for the buyer this is a second home and, prior to the budget, their stamp duty bill was £16k then that would mean that the purchase price back then was £356,250. In that case the new stamp duty would be £23,125.

If the current stamp duty is £41k and it is a second home then the purchase price would be £535,000 and the old stamp duty would have been £30,300

I really don't understand your figures.

Your words, not mine @Susanap. Are you always so hyperbolic?
I said there will be renegotiations. There are already renegotiations.

@Another2Cats actually I think you are correct on this. There was already a 3% surcharge in place on top of the standard rate which has gone up to 5%

I suspect the buyers here ( who don't seem the brightest sparks) had thought they could get away with standard stamp duty as they intended living in it and are now realising they can't. Will inform FIL

@Another2Cats to be honest as it's not my sale I hadn't taken much notice of what the previous rate was as it's not my cash I'm paying out -,it was actually his agent who told him the buyers stamp duty had gone up from £16k to £41k - and I just took that as gospel -

Stand by what I said earlier, they are buying a second house for over half a million pounds which they are planning to extend, and possibly reclaiming back the stamp duty they are expecting the chain to pay, they aren’t stretching themselves and if they are your FIL shouldn’t have to pay for this.

What I don’t understand is if your 85 year old FIL managed to knock a whopping £70,000 off his ongoing purchase 🤔 and you seem more than happy for him to cough up the difference, defensive about it even, then why are you even asking us for our opinion? Why haven’t you just gone ahead and split the bill as it sounds like you have pretty much made up your mind already rainingsnoring sorry I meant Crikeyalmighty

What is your mum and sister's financial situation? Are you the sole owner of the flat or do you own it jointly with your mum and/or sister?

The obvious solution would be for them to buy the flat off you if they are in a financial position to do so.

Otherwise you could sell it and buy a bigger place for you all to live in. Or sell it and buy the house you want for yourself and your child, and your mum and sister will need to rent elsewhere.

rainingsnoring: Are you always so pessimistic?!

I don't think anyone on this thread is saying there's likely to be a major house price crash because of increased stamp duty. Stamp duty has to be taken into account when buying a property and as most buyers have a limited pot of money, they have to adjust the amount they offer to take into account any increase in other costs. If the vendor is unhappy with their offer, the sale doesn't proceed.
Complications arise when there are different rates of duty for different buyers. First time buyers get a discount, second home buyers pay a premium. All the rates are going to change in April anyway and it's quite likely that any property coming onto the market in November is not going to be sold before the new, less generous allowances kick in.

It does sound as though either the EA or the buyer isn't exactly being upfront here.

"...they don't suddenly have an extra £25k spare in their pocket making it £41k rather than 16k - maybe they can but we will see - they haven't yet pulled out."

If the house is being sold for £535k then their stamp duty will be £41k, before the budget it would have been £30,300 so they need to find an extra £9,700 not £25k

Since this is a second home for them I would guess that they are not pushing themselves to the absolute limit as some first time buyers have to. I am sure that they likely have funds set aside to redo the kitchen and bathroom to their tastes. They will likely have an extra £9,700 available to them

Apparently they are also going to
extend the house and rent their second home out for 18 months whilst they do the refurb. Sounds like they can well afford £9,000 and they can claim it all
back anyway if they sell their second home.

Guys I am not liking the feeling of being picked on - and yep it does feel like bullying- I just want to help my lovely FIL move on as he wishes to- at 85 he doesn't want to keep repeating the process . If he was 62 and not in a rush and what he was moving to was in plentiful supply then yes I would tell him to tell them to shove it if they want a reduction.

Maybe they can afford it and are total try on merchants- maybe they aren't - whatever their excuses/try ons/reasons , my FIL wants out asap - and if he has to take £10k less or they pull out - it's his choice to make - what he is buying onwards isn't an easy thing to come across, very little of it for sale in this area at the right budget and I know he really doesn't want to lose it and if £10k pushes the sale through- he may well go with it- he may not - I'm not sure- depends I think on how much they try and negotiate downwards. at the moment though it's still ongoing so who knows.