I am buying a flat and have agreed to pay £250,000. I have now been advised that the seller also owns a garage on the development and it is a condition that she must sell the garage at the same time as the flat either to the new flat owner or to someone else who is already an owner on the development. The cost of the garage is £15,000. I do not want the garage and am tempted to withdraw. What should I do?
You should not pay £15,000 for a garage you do not want. More importantly, the additional £15,000 for the garage will mean that the total cost of your purchase will put you in a higher rate band for Stamp Duty Land Tax moving you from the 1% band to 3%. It makes no difference that the garage transaction may be subject to a separate Lease and arguably a separate transaction. The reality is that it is a condition of the Garage Lease that it can only be transferred to either a new flat owner or an existing owner of another flat on the development. Should you buy the garage at the same time as the flat then it is a “linked transaction” for Stamp Duty Land Tax purposes and Stamp Duty is payable on the total amount paid, £265,000 – at 3%. If you didn’t want the garage in the first place then the additional £5,450 Stamp Duty should make it an easy decision for you to withdraw.
* Emyr Pierce is Managing Partner of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email firstname.lastname@example.org