stamp duty madness

[Jimmyarm]

Perhaps a good solution would be to just remove stamp duty completely for UK born first time buyers on properties sub £500k.

[scenario8]

Blackpuddin said:

Outside London, in the new work premises created there. People would live in London and work outside it, rather than vice versa as currently.
Even if only adopted in a small way, something like this would reduce the pressure currently caused by almost entirely one-way commuter traffic.
The new outside-London business premises would of course be freehold - another advantage to London-based businesses, many of which don't need to be in the City.
Thickpuddin

We're going off topic here really but I promise you not everyone or every comuter within the M25 is heading into the centre. Trains and roads are stuffed full of people going in every which direction - including "out". The same can be said for all the near Home Counties.

[okgo]

To be fair most are heading into London. Rather than away from it.

[Muncher]

MitchT said:

I was looking at self-building and discovered, to my interest, that when you self-build you only pay stamp duty on the price of the land, not the price of the complete build or its end value. Apparently this is because stamp duty is actually a 'land tax'. Does this mean that we should only really have to pay stamp duty on the value of the land that a house is standing on, but that the government have conveniently chosen to ignore the fact that no one realises this, thus relieving us of huge amounts of money they they're not even entitled to?

Of course it is only paid on the land, it is a purchase tax and you are buying land.

Land is also defined as anything fixed to the land, hence it is not just the value of the plot itself.

[scenario8]

okgo said:

To be fair most are heading into London. Rather than away from it.

It wouldn't surprise me if a greater number of commuters were heading towards Central London than any other direction but I'd be mildly interested to know if that number is a majority. My contention, regardless, is to counter an idea that the vast majority of jobs held by Londoners are in Central London (say Zones 1 and 2). Businesses already park themselves in a variety of locations in and around London and beyond in the South East.

Forgive me if my memory fails me but I have it in my head you're Kingston based? Kingston is absolutely heaving with local traffic between 7.30 and 9.30. Many commuters travel into Central London but many don't and a great number are heading to Kingston and its environs from Central London (Clapham trains are packed). There are similar levels of commuters travelling within and to Croydon, Guildford, Dartford, Reading, Epsom, Leatherhead, Redhill/Reigate, Hemel...and they're just towns I happen to know very well. I don't doubt it's a similar experience all the way around the M25.

Anyway, stamp duty. A pain. It does raise a shedload of cash, mind. I can't see any great rush or political capital in any of the major parties investing parliamentary time in significant change, however.

[blueg33]

What bugs me, is that if a vendor elects to waive exemption to VAT on a land price, you pay SDLT on the gross price, so you pay a tax on a tax! As a business i can recover the VAT but not the SDLT on the VAT element.

[blueg33]

Ilikebeaver said:

It's rediculous.

It means that people who's houses are worth £260-£275k get stupid offers under £250k,

So it causes a gap in house prices too

I never understand that offer logic

SDLT at £250k is £2500 on £275k its £8250, so the price of the more expensive house only needs to come down by £5750 for the SDLT paid by the purchaser to be the same as if the house was at £250k.

[V8RX7]

blueg33 said:

Ilikebeaver said:

It's rediculous.

It means that people who's houses are worth £260-£275k get stupid offers under £250k,

So it causes a gap in house prices too

I never understand that offer logic

SDLT at £250k is £2500 on £275k its £8250, so the price of the more expensive house only needs to come down by £5750 for the SDLT paid by the purchaser to be the same as if the house was at £250k.

Whilst that is logical and I agree in theory.

Why bother pricing items at 99p or £399 - because despite being ridiculous it works - or in the case of stamp duty - it doesn't.

[scenario8]

Just to chip in that while the thresholds do have an effect on the market, we sell absolutely shedloads in the £255-275 bracket. And in the £510-550 bracket too. There isn't some mystical no-man's land devoid of any activity just above each of the thresholds.

[Nick Grant]

scenario8 said:

There isn't some mystical no-man's land devoid of any activity just above each of the thresholds.

Apart from the evidence I've already put at link up to. My old house has gone straight from being worth £250k to £300k.

[okgo]

blueg33 said:

I never understand that offer logic

SDLT at £250k is £2500 on £275k its £8250, so the price of the more expensive house only needs to come down by £5750 for the SDLT paid by the purchaser to be the same as if the house was at £250k.

Yes but chucking 5 grand on a mortgage is about £20 a month, to have to come up with it all in cash there and then is somewhat different.

[anonymous-user]

Stamp duty is actually SDLT -stamp duty land tax. It's a tax charged on "land transactions". I bought a plot which I'm building on right now - it's a tax that works in your favour when self-building.

Edited by anonymous-user on Tuesday 25th February 21:16

[scenario8]

Nick Grant said:

scenario8 said:

There isn't some mystical no-man's land devoid of any activity just above each of the thresholds.

Apart from the evidence I've already put at link up to. My old house has gone straight from being worth £250k to £300k.

I'm not sure I can be any clearer than my words you quoted and I don't understand how you can suggest otherwise. It is not a case that directly above the thresholds there is no activity whatsoever. The market is distorted but not to the exclusion of any activity. There is activity. All other things being equal properties can, will and do sell for values above the thresholds. We sell them. Regularly. Lots of them. An individual anecdote does not tell the whole story. Even your link lists sales at £265k, £260k, £262k and £280k.

[Nick Grant]

scenario8 said:

I'm not sure I can be any clearer than my words you quoted and I don't understand how you can suggest otherwise. It is not a case that directly above the thresholds there is no activity whatsoever. The market is distorted but not to the exclusion of any activity. There is activity. All other things being equal properties can, will and do sell for values above the thresholds. We sell them. Regularly. Lots of them. An individual anecdote does not tell the whole story. Even your link lists sales at £265k, £260k, £262k and £280k.

I didn't say there was no activity but it does significantly affect prices. It's not one anecdote, there are hundreds of examples...

https://www.google.co.uk/#q=stamp+duty+effect+on+h...

[New POD]

Having paid off my mortgage my house is worth about £190K, and I happen to have £60 in various accounts, saved. Which means at my £2499,999.99 limit there are loads of houses which meet my dream home specification. The artificial effect of the stamp duty limit will work in my favour, but I really think that if the %age should rise, it should be at the rate only above the limit.

Note : Don't really care where it's located, somewhere from Leominster to Wem, to Loughborough down to Coventry and back to Leominster.

Wife wants something with 3 double beds, and a BIG kitchen, and I want a double garage, with room for a fk off big shed in the garden. Must not be too new.

These 4 are my example to my tempt the wife to move away from family

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

Where as this is the only house which meets the requirements near her family, and quite frankly it doesn't come close (apart from close to the bypass)

http://www.rightmove.co.uk/property-for-sale/prope...

[mercGLowner]

kiethton said:

On that note would it be an idea to remove SD entirely in deprived areas to promote investment in selected regions/towns?

Edited by kiethton on Tuesday 25th February 14:56

I am pretty sure this has been done before by the previous Government. The perverse effects, I seem to remember, where that suspending SDLT in London Boroughs such as Tower Hamlets, meant that city types buying riverside apartments in canary Wharf got way with paying zero SDLT as their new pads were in the 'deprived' Borough of tower Hamlets.

What frustrates me is that SDLT is a discretionary tax. If I chose not to move, I don't pay anything, move and I get clobbered. It makes it rather tricky for a government to try and predict the amount of SDLT that they forecast on receiving in any tax year.

It just seems like logic and common sense to me that if the housing market and economy begin to pick up, with house sales beginning to rise, that the overall Tax take could exceed forecast, therefore, if I were chancellor, I would be inclined to tweak the rates and not lose out. I would change the structure on the lines already suggested, charging in bands as opposed to simply a flat rate on the overall price. No doubt the Labourites would scream favouritism for the so called wealthy....

But then again....I am not George Osborne ....

[okgo]

New POD said:

Having paid off my mortgage my house is worth about £190K, and I happen to have £60 in various accounts, saved. Which means at my £2499,999.99 limit there are loads of houses which meet my dream home specification. The artificial effect of the stamp duty limit will work in my favour, but I really think that if the %age should rise, it should be at the rate only above the limit.

Note : Don't really care where it's located, somewhere from Leominster to Wem, to Loughborough down to Coventry and back to Leominster.

Wife wants something with 3 double beds, and a BIG kitchen, and I want a double garage, with room for a fk off big shed in the garden. Must not be too new.

These 4 are my example to my tempt the wife to move away from family

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

Where as this is the only house which meets the requirements near her family, and quite frankly it doesn't come close (apart from close to the bypass)

http://www.rightmove.co.uk/property-for-sale/prope...

Quite telling how poor the interiors are on most of those places. I suppose buying a house is one thing but actually having cash to do it up is probably quite rare wherever they are as they're all awful!

[russy01]

okgo said:

New POD said:

Having paid off my mortgage my house is worth about £190K, and I happen to have £60 in various accounts, saved. Which means at my £2499,999.99 limit there are loads of houses which meet my dream home specification. The artificial effect of the stamp duty limit will work in my favour, but I really think that if the %age should rise, it should be at the rate only above the limit.

Note : Don't really care where it's located, somewhere from Leominster to Wem, to Loughborough down to Coventry and back to Leominster.

Wife wants something with 3 double beds, and a BIG kitchen, and I want a double garage, with room for a fk off big shed in the garden. Must not be too new.

These 4 are my example to my tempt the wife to move away from family

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

Where as this is the only house which meets the requirements near her family, and quite frankly it doesn't come close (apart from close to the bypass)

http://www.rightmove.co.uk/property-for-sale/prope...

Quite telling how poor the interiors are on most of those places. I suppose buying a house is one thing but actually having cash to do it up is probably quite rare wherever they are as they're all awful!

Not really, 2 of those houses are obviously old owners. Plus you have to remember that not everybody is the sort of person who wants to splash cash on interiors and glossy kitchens.

Some of the people I know with the most disposable cash live in bog standard houses like the above but instead spend money on cars, holidays etc. It's a bit unfair to assume they can't afford it.

[New POD]

russy01 said:

okgo said:

New POD said:

Having paid off my mortgage my house is worth about £190K, and I happen to have £60 in various accounts, saved. Which means at my £2499,999.99 limit there are loads of houses which meet my dream home specification. The artificial effect of the stamp duty limit will work in my favour, but I really think that if the %age should rise, it should be at the rate only above the limit.

Note : Don't really care where it's located, somewhere from Leominster to Wem, to Loughborough down to Coventry and back to Leominster.

Wife wants something with 3 double beds, and a BIG kitchen, and I want a double garage, with room for a fk off big shed in the garden. Must not be too new.

These 4 are my example to my tempt the wife to move away from family

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

http://www.rightmove.co.uk/property-for-sale/prope...

Where as this is the only house which meets the requirements near her family, and quite frankly it doesn't come close (apart from close to the bypass)

http://www.rightmove.co.uk/property-for-sale/prope...

Quite telling how poor the interiors are on most of those places. I suppose buying a house is one thing but actually having cash to do it up is probably quite rare wherever they are as they're all awful!

Not really, 2 of those houses are obviously old owners. Plus you have to remember that not everybody is the sort of person who wants to splash cash on interiors and glossy kitchens.

Some of the people I know with the most disposable cash live in bog standard houses like the above but instead spend money on cars, holidays etc. It's a bit unfair to assume they can't afford it.

To be honest, I'd rather not buy a house that has any decoration that is anything other than hideous. I need motivation to decorate, and hideous is motivation.

The furniture is obviously 'practical' and random though. Nice to see houses not 'show-roomed'

[V8RX7]

okgo said:

Quite telling how poor the interiors are on most of those places. I suppose buying a house is one thing but actually having cash to do it up is probably quite rare wherever they are as they're all awful!

Perhaps their tastes differ to yours or they did it up when they moved in - 20yrs ago and their tastes haven't changed.