Stamp Duty - Likely Changes
Discussion
Currently house shopping, and as the housing market is flat in the area I currently live in (Pontefract) in the 300+ bracket (below that shifts quick)I'm looking at buying my new home and leaving the old one for sale.
However as I am cash poor following a divorce, the second home stamp duty is really restricting my buying power. I know I'll get it back if I sell mine, but it still hurts short term.
2 of the houses I'm looking at are new builds that wont be ready till December, so I was wondering out loud if as part of the plan to keep the economy going the Govt might do some easing of this in the next few months.
From my point of view the rules and legislation of the second home stamp duty seem to be strangling the housing market, at least up north anyway.
However as I am cash poor following a divorce, the second home stamp duty is really restricting my buying power. I know I'll get it back if I sell mine, but it still hurts short term.
2 of the houses I'm looking at are new builds that wont be ready till December, so I was wondering out loud if as part of the plan to keep the economy going the Govt might do some easing of this in the next few months.
From my point of view the rules and legislation of the second home stamp duty seem to be strangling the housing market, at least up north anyway.
Higher rater SDLT is hitting a fair few, especially those who are looking at £300k+ second homes.
It seems to be doing little to stop those who are looking at sub £200k properties.
I doubt that the government is likely to admit that they got it all wrong but they might and it might change later this year. I know a number who are holding off until then JIC and will buy anyway, but not until the Autumn Statement is out of the way.
IMO they would be better moving to a 1% pa flat tax on the outstanding balance on BTL mortgage as at 1st June each year. Stops people maxing out the BTL loans and provides revenue whilst not shutting out those who want to get ahead in life, despite the best efforts of those above pushing them back down and those below pulling at the same time...
It seems to be doing little to stop those who are looking at sub £200k properties.
I doubt that the government is likely to admit that they got it all wrong but they might and it might change later this year. I know a number who are holding off until then JIC and will buy anyway, but not until the Autumn Statement is out of the way.
IMO they would be better moving to a 1% pa flat tax on the outstanding balance on BTL mortgage as at 1st June each year. Stops people maxing out the BTL loans and provides revenue whilst not shutting out those who want to get ahead in life, despite the best efforts of those above pushing them back down and those below pulling at the same time...
Rude-boy said:
IMO they would be better moving to a 1% pa flat tax on the outstanding balance on BTL mortgage as at 1st June each year
Unless I'm missing sthg, I can't see how on earth govt would track that. afaik There are no mechanisms in place to know individual mortgage arrangements and adding yet another layer of bureaucracy to set one up and maintain the database would cost a mountain of money.Impossible question to answer, expecially as we have a new chancellor. Best wait until the Autumn Statment.
However, in my view (FWIW) it's highly unlikely there will be any changes. The additional SDLT for second properties is a key way for the goverment to try and stop house prices escalatating to even more unaffordable levles. I can't see them relaxing anything that would encourage more house price inflation.
However, in my view (FWIW) it's highly unlikely there will be any changes. The additional SDLT for second properties is a key way for the goverment to try and stop house prices escalatating to even more unaffordable levles. I can't see them relaxing anything that would encourage more house price inflation.
Luckily we wont be paying for the house until December, and might house might sell before then, and hopefully the stamp duty might change
current situation is that we are looking at 2 homes on the same development (great location for schools and commuting)
1. 4 bed semi - small garden - £550k
2. 5 bed detached half acre garden, very private - £925k
option 1 will do for now, but we will outgrow it in 3-5 years
option 2 really pushes the budget, and is a forever home
I'm just loath the pay stamp duty on option 1 when we will have to pay even more when we move again
current situation is that we are looking at 2 homes on the same development (great location for schools and commuting)
1. 4 bed semi - small garden - £550k
2. 5 bed detached half acre garden, very private - £925k
option 1 will do for now, but we will outgrow it in 3-5 years
option 2 really pushes the budget, and is a forever home
I'm just loath the pay stamp duty on option 1 when we will have to pay even more when we move again
Behemoth said:
Unless I'm missing sthg, I can't see how on earth govt would track that. afaik There are no mechanisms in place to know individual mortgage arrangements and adding yet another layer of bureaucracy to set one up and maintain the database would cost a mountain of money.
If you have a BTL you are going to have to do a Tax Return every year.Not hard to add the question "How much capital balance was outstanding on any loans secured wholly or partly on investment properties owned by you as at the 1st June. If any relevant investment property is owned by more than one person you should express this figure relative to your ownership share. (i.e. Two people own one investment property equally each should account for 50% of the outstanding secured debt as at 1st June in their respective returns.)"
Their is no real mechanism in place to know how much a hairdresser earns, but HMRC have a damn good idea and have sufficient powers to investigate or require evidence.
Lenders can generate an amount owing statement without much trouble (will likely make a charge for doing so though!) as they know that all their BTL borrowers will need one for that day. If HMRC are concerned that someone is telling porkies then they can investigate, just as with anything else, and put the taxpayer to proof as to the source of their figures.
We have had compulsory Land Registration since 1990 in E&W and the Title to each property records if there is or ins't secured lending and the name of the lender.
There would be a s
t load less fraud going on as well. The number of cunning wheezes I have had to knock back from Clients as unworkable/downright bent are unbelievable. PS the above drafted whilst taking a couple of calls and so on so not really as tight as it would be if you put some thought into it, but a starter for 10.
Edited by Rude-boy on Friday 5th August 12:49
Eric Mc said:
Wait until Self Assessment is abolished in two years time.
I'll let my accountant worry about that then. Did my last SA return in January and vowed never to do another now i have a business i can offset the fees against!Just need to find one now as you're a few too many miles from me Mr Mc!
Rude-boy said:
I'll let my accountant worry about that then. Did my last SA return in January and vowed never to do another now i have a business i can offset the fees against!
Just need to find one now as you're a few too many miles from me Mr Mc!
You do know that the fees charged specifically for completing tax returns are NOT claimable for tax relief?Just need to find one now as you're a few too many miles from me Mr Mc!
Welshbeef said:
Why is it being replaced?
Purpose of self assessment is to ensure correct tax is paid.
It's very straight forward
Not cost effective enough for HM Treasury. Effectively tax collecting is being privatised i.e. HMRC will get rid of thousands of staff and all tax wil be administered by those who pay it i.e. you , me, the banks, employers etc. Monitoring will be done by super - duper - wowee computer systems and all will be fine and lovely.Purpose of self assessment is to ensure correct tax is paid.
It's very straight forward
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