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Where Taxpayers and Advisers Meet

Overage and SDLT

Posts: 1
Joined: Mon Jul 15, 2019 10:17 pm

Overage and SDLT

Postby Frazer » Mon Jul 15, 2019 10:34 pm

Hi all,

im hoping someone can help,

we are looking to buy a house at £325,000, the house has an extra garden area attached to the original garden, this has an area of about 0.33 acres, building of new houses is happening in nearby fields but not yet the field surrounding the garden. Planning was given for houses in the surrounding fields but has since lapsed, but i guess its reasonable to assume that this will be developed at some point in the near future.
The garden was never part or subject to any planning application, but the vendor has said that they want to include an overage of 25% for 20 years on the extra garden area. this overage clause i don't believe has been drafted yet so the exact T's&C's are not known.

We have no intention of selling or developing the extra garden area, so do i pay stamp duty on the £325,000 or on the overage as well? even when the overage value is unknown? also what are the implications if i sell the house and land to another person that also does not want to develop or sell for development? are there any additional liabilities for me or the new homeowner?

is it a too complex issue and am i best to stay well away and buy a completely different property?

Many Thanks in advance for any advice offered

Posts: 4506
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Overage and SDLT

Postby pawncob » Tue Jul 16, 2019 12:23 pm

I assume this will be in the form of a covenant. You pay SDLT on the sale price. The covenant may (or may not) be enforced.
With a pinch of salt take what I say, but don't exceed your RDA

Posts: 199
Joined: Sun Apr 30, 2017 5:45 pm

Re: Overage and SDLT

Postby SDLT Geek » Tue Jul 16, 2019 8:07 pm

If you buy a property for a fixed price and for entering an overage, then you would normally apply to defer paying SDLT on the overage, making an estimate of the sums payable under the overage.

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