Stamp duty: I avoided paying it - Times Money Mentor (2024)

Robin Young faced the agony many homebuyers experience: his savings were going to be swallowed by stamp duty.

“We had £20,000 in savings – enough for the £19,500 we needed to pay the 5% deposit on a £390,000 house in Banbury, Oxfordshire.

“But stamp duty was going to be £9,500, which would have left us with only £10,500 for the deposit.

“It looked as if me and my girlfriend Agnieszka would be forced to buy a home somewhere smaller and cheaper.”

However, after setting their hearts on the four-bedroom new-build from Bovis Homes, they negotiated the property price in a deal that resulted in them paying not a single penny in stamp duty.

“I had noticed that new-build companies sometimes had offers for stamp duty,” says Robin, 36.

“I spoke to sales representatives at Taylor Wimpey and Barratt to see what they offered. I was then in a position to tell Bovis what their competitors were willing to pay.”

The couple went into their negotiations aiming not only to get the £9,500 stamp duty covered, but to have free carpets and tiling thrown in too.

“You normally have to pay extra for flooring, which can add up to thousands of pounds.

“The Bovis sales person said she didn’t think they would be able to do it,” says the finance manager, who also runs a gym equipment price comparison website Fitness Savvy.

After nervously waiting for three days, the couple heard that Bovis had agreed to pay their stamp duty and flooring costs.

“The only terms were that we came down that day to place the security deposit of a few hundred pounds – I raced there to make the payment. Not having to pay for flooring saved us £6,000 to £7,000.”

The couple’s lucky streak continued during the buying process in December 2016 – this was before the stamp duty exemption was introduced for first-time buyers.

“We were not supposed to be able to choose the tiles and carpets, but when we went to speak with the sales agent during the buying process, she noticed that no flooring had been chosen, and let us have our say right there and then.”

What I did

1. I had been looking online at new-build houses for a year before we were able to buy a home. I actually took the virtual tour of the Bovis home we eventually bought but I wasn’t earning anywhere near enough to afford it.
   
2. A promotion at work and a pay rise brought my salary to the level we needed, and once we saw the show home itself we knew it was the house for us.
   
3. I spoke to sales reps at Taylor Wimpey and Barratt to see what they would offer in terms of extras and stamp duty. Taylor Wimpey offered flooring and Barratt offered flooring and stamp duty.
   
4. We decided to negotiate with Bovis on the stamp duty and flooring. Within a few days, we heard that we’d got them both. We then applied for a mortgage.

What worked

• Ambition! My partner and I were keen to get a house that would otherwise have been outside our property price range based on the deposit we had. The government’s help to buy ownership scheme let us do this.
  
• The time of year. A friend told me that as we were buying near Christmas, and it was getting to the end of the financial year when companies like to bump up their figures, we should really push for as much as possible.
  
• Going to other house builders first. Once I knew what Taylor Wimpey and Barratt would offer I was in a position to negotiate more effectively with Bovis.
  
• Carpeting and tiling throughout the property would have cost £6,000-£7,000 so it was a nice amount to save.
  
• Our son Charlie was only eight months old when we moved in, so the savings we made ensured we had everything we needed for him, and allowed us to plan for our second child, Leonardo, who was born in October 2018.

What didn’t work

• Make sure you don’t sign off any building snags – like cracked tiles, or poor paintwork – with the builder until everything is done. These are typical on a new build, and they can be quite bad; we had over 100 on our original list. We were pressured into signing off with a few things still outstanding – such as cracked rendering on the outside of the house, a non-existent washing line and some broken tiles. Even though Bovis noted them down, it has still not sorted them out – and we’ve been here three years! No matter how small the snag is, don’t sign off on it until everything is completed.