Stamp duty question

No

Don't see why not. The prices have been mutually negotiated. You could equally make the transaction by the owner of House 1 paying £120,000 and the owner of House 2 paying nothing, taking House 1 in part-exchange.

In message , Terry Harper writes

How would that reduce the stamp duty?

IIRC It used to. Did they change that rule?

tim

In message , tim..... writes

AIUI, yes.

Yes it is. Just because the sellers stick a price tag on their houses doesn't mean that is their open market value, it's merely a statement of what they hope to get. Unless there are other buyers willing to offer more than 130k for H1 or more than 250k for H2, there is no reason for a district valuer to overrule the agreed prices.

After all, 20k off the asking price is pretty well what you *expect* to happen on the open market these days, simply because asking prices are generally too high.

Mind you, there is a bit of a problem with the OP's statements that the two parties "want to" buy at the asking prices. For all this to be above board, they should not "want" this at all.

I understood "wants to" as meaning that is an accurate valuation.

I understood it as meaning "My wife really wants the place at any cost, but I'm too much of a realist and would never seriously offer that much. If we lose it, we lose it. She might be cross with me for a few days, but normal service will resume within a week, tops.".

Can't they both move into Mike's building in exchange for the two houses and as many bananas he can eat then he can take the houses to the IOM and live happily ever after?

Funnily enough, there was something in the paper today about a sandstone mansion which was to be bulldozed to make way for a new housing development, but instead the developer liked the look of it so much that he decided instead to dismantle it, label and store all the stones, and offer it for sale as a "kit" house capable of being re-built anywhere. It wasn't reported whether he was marketing it for the IoM.

It certainly used to be legal andI have done it. In about 1987 I bought a larger house and the seller bought my smaller house. We agreed on the sum that he would pay me and that was the figure that the stamp duty was based on. The solicitor called it "the consideration" IIRC.

The rules may have changed of course, since then.

Robert

I should have added that in your case you would pay stamp duty on

Again, the rules may have changed in the last 20 years.

They almost certainly have, so that "the consideration" (for stamp duty purposes) for purchase of the cheaper house would be its deemed market value (in this case 130k if that could be supported as reasonable), and that for the dearer house would be the money paid (120k) *plus* the value of the cheaper house. Makes sense, since after all you'd be "paying for" the dearer house with the cheaper house plus some money.

I agree that it makes snse that it should be as you say. perhaps it changed at the same time as the rules about connected purchases - the ones that prevent you agreeing to pay a reduced amount for the house plus an incresed amount for the carpets.

Robert

The rules do allow that, but only if the price for the carpets isn't unreasonable.

Connected purchases are something else, like trying to get away with selling a house in two stages, which is OK for spreading capital gain over two years, but won't avoid stamp duty if the sales are "part of a series". I suppose one could get away with it if the two part-sales were genuinely negotiated separately.

I wonder if you could sell half the house to the husband and the other to the wife, and have each of them pay SD on half the house.

Or half to the new occupants and the other half to a BTL wheeler dealer who would charge them half rent for a bit, and perhaps later flog them the other half, with a bit extra for his trouble.