SDLT and purchase reservation fees

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    SDLT and purchase reservation fees

    Hello folks,

    For second homes:

    Purchasing a property for 33k. Reservation fee 6k. Total 39k = No SDLT.
    Purchasing a property for 35k. Reservation fee 6k. Total 41k = 3% SDLT.

    This is correct isn't it?

    Thanks.

    #2
    The reservation fee is part of the price. Albeit it does not go to the seller. It is a scam - the seller probably wasn't properly informed of the fee (which effectively reduces the price paid to them).

    Comment


      #3
      Where in UK can you still buy a liveable residential property at £35 K? ( If not a scam ) .

      Comment


        #4
        They need to do something about SDLT!! I am sitting on ££££ wanting to buy but SDLT is coming in at £22K per mortgage and I am not paying it.

        This is costing them missed revenue too.

        Comment


          #5
          Sounds like the policy is achieving its goal then!
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            Yeah great, the Osborne tax is putting off existing home owners from buying property that first time buyers cannot afford, and it is causing the government to lose ££££ in income tax from rent.

            Comment


              #7
              I didn't say it was a good idea!

              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Originally posted by combo75 View Post
                They need to do something about SDLT!! I am sitting on ££££ wanting to buy but SDLT is coming in at £22K per mortgage and I am not paying it.

                This is costing them missed revenue too.
                Be patient, the furlough scheme is artificially propping everything up at the moment and will be for a while longer yet and when furlough ends Boris thinks that the government are simply going to “build, build, build and deliver jobs, jobs, jobs for the people of this country“.
                House sales are not a priority to the government right now but at some point after furlough ends and some people don’t have jobs to go back to and the rest of the country is paying back all the furlough money through higher taxes either the housing market is going to crash and you’ll be picking up bargains that you don’t mind paying stamp duty on or Boris will take a reality check and realise that measures such as stamp duty cuts need to be put in place to keep the housing market moving. I personally think that by this time next year the sort of places you want to buy that would currently incur 22k of stamp duty will plummet in price by more than 22k (Just my opinion of course).
                I am already noticing houses local to me being reduced by small amounts on rightmove and these aren’t just the big expensive countryside houses that most people can’t afford, I’m talking about 2 and 3 bedroom family homes that this time last year would’ve been sold within a couple of weeks of being advertised.
                Im ready and waiting with the money in the bank for deposits on two or three more houses but until furlough ends and the reality of the economic situation is known then I have no plans to purchase.

                Comment


                  #9
                  Originally posted by Gordon999 View Post
                  Where in UK can you still buy a liveable residential property at £35 K? ( If not a scam ) .
                  Apologies Gordon, I should have said that the property would be in need of refurbishment.

                  Comment


                    #10
                    Hi BTL, I am in the same position as you and I am sitting on quite a bit of money for deposits. But I am not willing to pay £16-22K in SDLT towards buying a property.

                    I have noticed that a lot of property seen in my area is coming down but not by enough.The furlough scheme is keeping everything alive like you say.

                    But they still need to do something about SDLT because the house prices in my area are still too high even if you negate the SDLT.

                    Some house prices in my area were rising by £10K year on year, which only adds to the misery of SDLT.

                    It's ridiculous but I and I don't know where to complain. I know RICS and the NLA are calling for it to be be amended.or even scrapped.

                    This attack on the landlord philosophy has to stop. It's a Labour house thing!! and I can't believe the Conservatives are killing their supporters with it.

                    Cut SDLT for all and encourage investment will help the Conservatives and us all. Because it's too expensive to buy and move.

                    Comment


                      #11
                      I very much doubt the market is going to have a correction downwards, I am really not even sure why any experts are predicting this. Large house price falls usually fall exponential growth in houses making them very unaffordable. Add to this that banks are well capitalised and looking to expand lending. The other more important point is that interest rates are at 0.1%.......Anyone waiting for a house price collapse in these times will be waiting for a very long time. If people lose their jobs the interest payments on their home loans would be tiny, hardly the circumstances for a large sell off

                      Comment


                        #12
                        combo75 I don’t see the attack on landlords coming to an end anytime soon, both labour and conservative governments have spent the last 3 or 4 decades funding free homes to asylum seekers, single mothers and pretty much anyone that doesn’t want to go to work to buy their own home or pay their own rent, most of those people then have children that grow up thinking it’s normal to be housed for free and so the situation escalates (more breeding and more free housing provided for them) which is what leads to the supply and demand problems with housing. If these people had to go to work and spend their own money to put a roof over their heads and pay their own bills they wouldn’t breed so frequently and there wouldn't be so many people in need of free homes. Landlords and second home owners are an easy way to deflect the blame and cover up the real reason for shortages in housing.

                        Comment


                          #13
                          hech123,

                          You could be right, the truth is that nobody knows what’s going to happen that’s why the experts are predicting different outcomes but I struggle to see how me purchasing a property today for £200,000 with £7,500 of stamp duty and receiving a pre-tax and pre-expenses rental income of around £10,000 - £11,000 between now and this time next year is worth it, especially considering the time I would have to put in to managing the property. I personally don't see how it is possible that between now and this time next year we won’t see some opportunities for some bargains through forced sales or at least a 5% drop in average prices which instantly negates all of the pre-tax rental income I would receive on that £200,000 property. Obviously interest rates could go up during that time making the repayments higher meaning it would’ve been advantageous to secure a mortgage today but we have to remember why interest rates are at 0.1% today, it’s not for no reason it’s because of the uncertainty of the future and this is before furlough has ended! When I look around me at the amount of people on furlough none of their employers are in any hurry to bring them back to work, mines just been extended for another month until the end of July and the company has announced planned redundancies. Money isn’t moving around like it was before and it won’t be for a lot longer yet.

                          Comment


                            #14
                            Sorry I have only just picked this up. Chances are we are going to see huge inflation, property is going to be a very good place to be in. The idea of being an expert is you should have a very good prediction of what is going on and at least an understanding of how the market works. As I said prediction huge defaults and a collapse in prices is ridiculous when rates are 0.1% - This far I have been proved right as most markets I see are powering ahead. Your property above is no doubt a very tight example but factoring in growth and rent increases and it should still do well. You would be better to travel further afield as the North will have a much stronger second half of the property cycle than the South, it usually does. As for these experts........they are experts like an estate agent is an expert in letting property locally.

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