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  • Tax

    Vendor wants to delay sale until after 6th April 2016

    Hi All,

    I had just agreed an offer on a property. Currently the stamp duty would be £550.

    The agent just informed me today that the vendor has a tax issue and doesn't want to dispose of the property until the next tax year. Therefore SDLT is likely to be £5500. I see my options:
    1 - pull out
    2 - pay the increased SDLT in April
    3 - counter offer based on this change of circumstance up to the full SDLT amount or a portion

    Any thoughts or advice would be appreciated. It's a good property in a good location, but I don't think it is and extra £5.5k good, maybe a little better (which is probably my 3 counter offer price!).
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    We recently seen a letter from HMRC that suggests that any property that has been exchanged before April 2016 but not completed before April 2016 will not be subject to the additional SDLT issues
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    (17-12-2015 01:29 PM)Simon Misiewicz Wrote:  We recently seen a letter from HMRC that suggests that any property that has been exchanged before April 2016 but not completed before April 2016 will not be subject to the additional SDLT issues
    Hi Simon, interesting. I would have thought that only properties that exchanged prior to the tax hike being announced would be let off (I.e. New builds with much longer completion times)?
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    I would not even consider option 2.
    Either option 3 or option 1.
    Nothing is as good as what your wallet says!
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    Or ask the vendor to pay the difference! i.e. the 3%.

    The incentive should be disclosed to the lender and the valuer, and he will most likely down value the property by that amount.

    Happy wallet!
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    It's either 1 or 3 agreed. The idea of exchanging before and completing after would be best
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    I went for option 3 and the vendor agreed. Seems like the tax will apply for any completion after 1st April though.
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    If you are purchasing a property and exchanged contracts before November 25 – when the Autumn Statement was delivered – you will not have to pay the higher tax rate. This is true even if you complete after April 1.
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    Yup, so everyone who brought a new build with completion a year later etc. I'll have to pay the tax hence getting a reduction from the vendor as it wasn't clear at the time of agreeing the deal. It's in an area where I can imagine the capital app. will have covered the price rise already, although my last in that area.
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    I am in a similar situation (kind of anyway). Not that the seller wants to delay the sale, just that I am trying to complete before the deadline.

    I have put in an offer of £475. The stamp duty payable on this will be just under £14k. After April, the stamp duty will be £28k. 50% higher!

    So I have said to the agent, I am happy to use their advisor and solicitor, and if they can complete before the tax changes I will increase the offer to £485k. I'm waiting for them to get back to me

    What are your thoughts on this? Is it possible for the solicitors to write up a clause that purchase price is £485k if completion is before 6th April, otherwise purchase price will be £475k?
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    You are into overage and underage territory which is always expensive, but normally possible....

    I wouldn't offer the option of completing after, and I wouldn't use their solicitor too. You then have no control.
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