Should Stamp Duty Be Abolished ?

[Pulse]

pork911 said:

a flat % rate would be preferable to banding ...but for you if no one will want to pay, it ain't worth it



the duty wouldn't be a real issue if you were staying in the same band but it appears you are looking to move to a house approaching twice the value of your current one, a really quite depressing first world problem

A first world problem it may be, but 'approaching twice the value of my current home' doesn't really mean all that much - it's only just over £250k!

[pork911]

alfaman said:

pork911 said:

alfaman said:

Stamp duty shoould be differentiated between citizens and non-citizens

in a sense already is but not in the way you might hope!

0% stamp or IHT ....but its open to anyone who wants to try it that way

interesting thought ... foreign buyers who are non domiciled pay NIL IHT , whereas Brits get hammered .....

not necessarily

[pork911]

Pulse said:

pork911 said:

a flat % rate would be preferable to banding ...but for you if no one will want to pay, it ain't worth it



the duty wouldn't be a real issue if you were staying in the same band but it appears you are looking to move to a house approaching twice the value of your current one, a really quite depressing first world problem

A first world problem it may be, but 'approaching twice the value of my current home' doesn't really mean all that much - it's only just over £250k!

how does it not really mean much?

and even if it doesn't, how so then the depressing problems????

[MitchT]

I don't think stamp duty is stifling the housing market. I think a disturbing lack of wage inflation (when rises in house prices and basic living costs are factored in) is what's stifling the housing market. But, I do think stamp duty should be abolished. It's money for nothing and it's an £1,800 cost that my partner and I could well do without if a house purchase we're hoping to make sometime around late August comes off.

Edited by MitchT on Thursday 16th May 18:28

[Deva Link]

Pulse said:

1. Our house is worth just slightly over the 1% rate, meaning no-one will want to pay the tax on buying ours.
2. The houses we've been looking at are slightly over the 3% rate, meaning an extra £5000 or so to pay on a house.

Those two statements together don't really make sense.

You accept that no-one will want to pay tax on your house, but then you seem to think that it's somehow mandatory that you'll have to pay the extra on your next?

[liller]

SDLT is an awful tax. I had to pay £2500 after taking out a 10yr lease recently, not only that, the SDLT was based on the rent including VAT so it felt like a tax on a tax if you know what I mean.

[037]

I can't see how reducing SDLT would not give a little boost to the economy!
More people moving allows Gavin to buy more shiny suits. People will then make their new home a bit nicer which will benefit the decorators/builders/carpet layers ect who will probably all go and replace the car , go on holiday or get new tits for the wife , whatever !!
Posters who go on about ' that's how we got in this mess in the first place' are talking out of their arses in my opinion and presuming that everybody is skint.

[LeoSayer]

richie99 said:

Completely agree about the mobility issue. Was looking to move a year or 2 ago, for a number of reasons including schools but I'd be stung for 30k in stamp duty alone just to move to the same type of house a few miles away. So haven't moved.

Same here. Moving house involves enough expense and hassle without adding another £30k on top.

How does the government think that stamp duty gets paid? Ultimately it will come from less spending on decorating and furniture and more than likely will end up on the mortgage. Or more likely no move at all because it's too bloody expensive.

The 'slab' method of calculation is utterly insane. Who thinks up this st?

[Derek Chevalier]

LeoSayer said:

How does the government think that stamp duty gets paid?

You will most likely be saving more in heavily subsidised mortgage repayments over the next few years than you will have to fork out on stamp duty.

[speedy_thrills]

bad company said:

speedy_thrills said:

I’m quite interested in how we define morality in the tax system?

It’s easy to oppose taxation on this-or-that item but, in truth, compared to raising that tax on incomes or VAT stamp duty seems very fair..

Fair point but IMO stamp duty is damaging the economy by discouraging people from moving.

I echo a previous poster in noting that if trading houses is your economy you are in trouble.

If though you mean it restricts movement of individuals towards geographic areas of employment it seems the less of two evils.

[oyster]

To all those posters talking about stamp duty restricting the movement of labour?

Really how many people have been hit by this? Most people who move for work do not consider buying property at each of the places they work, they usually rent.

I've worked in various parts of the UK as well as the US, Middle East and Asia and just rented my place out each time.

[sugerbear]

037 said:

I can't see how reducing SDLT would not give a little boost to the economy!
More people moving allows Gavin to buy more shiny suits. People will then make their new home a bit nicer which will benefit the decorators/builders/carpet layers ect who will probably all go and replace the car , go on holiday or get new tits for the wife , whatever !!
Posters who go on about ' that's how we got in this mess in the first place' are talking out of their arses in my opinion and presuming that everybody is skint.

This is like saying "I can increase my income by buying and selling stuff to my wife". Your income hasn't increased, just the circulation of money has increased internally." Buying a new car is nice, but if the car company is owned by a foreign company then it is just increasing amount we need to import.

We need new business that exports, not to re-cycle the money we already have.

[jamiebae]

Let's assume you are looking to buy your second house, have some equity in your old place, and need a 10% deposit plus costs, fees etc.

Old place sells for £249,999, meaning £3750 in agents fees, plus another k in legals across both transactions, so call it £5k all in, paid from savings. You're then left with the equity in the old house of £40k as a deposit on the new house.

That should give you a budget of £400k for the new house assuming you have a big enough salary, but because a £400k house will attract stamp duty of £12k you're now way short of being able to buy it and your budget drops to £300k. This allows £9k for stamp duty and £31k for your deposit, so you've just blown £14k of equity/capital and added £59k to your mortgage to move to a house £50k more expensive than your old one. To get that money back you need the house to go up in value by 7%+ just to leave you in a financially neutral position.

So the natural thing to do is stay put, and not put all that money into the economy by paying solicitors, estate agents, surveyors, furniture stores, carpet fitters, DIY stores etc, because it's just not worth moving until you've saved up a skip-load more cash.

The main issue is that the thresholds haven't kept pace with house price inflation, if all the levels moved up one band it would give the market, and economy, a big boost.

[Derek Chevalier]

jamiebae said:

The main issue is that the thresholds haven't kept pace with house price inflation, if all the levels moved up one band it would give the market, and economy, a big boost.

Alternatively, the Government could raise interest rates and get the market moving again

[sugerbear]

Derek Chevalier said:

jamiebae said:

The main issue is that the thresholds haven't kept pace with house price inflation, if all the levels moved up one band it would give the market, and economy, a big boost.

Alternatively, the Government could raise interest rates and get the market moving again

I like what you did there.

[Randy Winkman]

jamiebae said:

The main issue is that the thresholds haven't kept pace with house price inflation, if all the levels moved up one band it would give the market, and economy, a big boost.

Lower house prices would give the market an even bigger boost.

[Pulse]

Deva Link said:

Those two statements together don't really make sense.

You accept that no-one will want to pay tax on your house, but then you seem to think that it's somehow mandatory that you'll have to pay the extra on your next?

Well we'll soon see. We put an offer in today of £250k. If we get it for that, we can afford to sell ours for £125k (even though it's worth about £10k more).

As another poster said though, it may be worth us 'paying the stamp duty' if it comes to it.

[pork911]

Pulse said:

(even though it's worth about £10k more).

really?

[mercGLowner]

I really detest SDLT as well, and agree with the comments suggesting it stifles the housing market and all the associated activity which comes with moving house.

Once again though, it is a tax that has become for too political. Any move to reduce, change for the better or abolish will result in wails of 'tax giveaways to the richest in society' by the Labour goons. Common sense is unlikely ever to prevail, the average taxpayer has just become desensitised to the amount of tax and waste they have to contribute to.

[pork911]

mercGLowner said:

I really detest SDLT as well, and agree with the comments suggesting it stifles the housing market and all the associated activity which comes with moving house.

Once again though, it is a tax that has become for too political. Any move to reduce, change for the better or abolish will result in wails of 'tax giveaways to the richest in society' by the Labour goons. Common sense is unlikely ever to prevail, the average taxpayer has just become desensitised to the amount of tax and waste they have to contribute to.

even if it did stifle the housing market would that be a bad thing? a proper correction post GFC has yet to occur