New property plus fittings and fixtures - stamp duty

by **Smith01** on Sat Oct 06, 2007 1:38 am

I'm looking to buy a brand new house from a builder for Â£250K. This is as much money as I want to spend on the house and means I would fall into the 1% stamp duty bracket. However, if I choose Â£1000 worth of optional extras for the house that would fall into the 'fixtures and fittings' category rather than chattels - I assume I would be liable for 3% stamp duty. If I negotiate a price for the house including the 'extra' fittings and fixtures that still falls below the Â£250K threshold - is there any way I can fall foul of the tax office? Would they consider that I have structured the deal to avoid the 3% bracket, even though I simply don't want to spend more than Â£250K on a house and have bartered with the builder to achieve this?

Thanks

by **Nick Beecham** on Sun Oct 07, 2007 11:44 pm

That would be fine.

Best wishes
Nick
Nick.Beecham@ffw.com

by **Smith01** on Mon Oct 08, 2007 12:00 pm

Hi Nick

Thanks for your reply. I have a new issue. I have been offered a part exchange deal with the builder. The builder was not willing to add the extras on to the new house for the existing price, but instead said we could adjust the offer price on my house and adjust the asking price for the new house to allow for the extras in the price. Is this still an acceptable negotiation from HMRC point of view? It is a small amount and is still within what would be considered 'market value' range for both houses.

Thanks

by **Nick Beecham** on Tue Oct 09, 2007 12:00 am

That would not be fine.

It may be a small amount but the prices would not truly be based on market value - as evidenced by the builder's refusal to accept the original deal.

Best wishes
Nick
Nick.Beecham@ffw.com

by **Smith01** on Wed Oct 10, 2007 8:24 am

Nick - Once again, thanks for your advice.

I think I've solved the issue, but your opinion would be appreciated.

Current negotiation - we don't adjust the prices for either the P/Ex house or the new house, they stay as originally agreed. I've negotiated to get just a few of the extras thrown in for the original asking price of the new house. Based on your first reply - I'm assuming that's OK, regardless of the fact I would be in a part exchange deal? Any odd rules relating to intent to avoid here?

Thanks again