How far will house prices fall [volume 5]
Discussion
Jobbo said:
NickCQ said:
The value of the flat just went up £15k
Good luck with that - I doubt the buyer's mortgage valuation will concur.Even if not it wouldn't really matter as the buyer wouldn't need to borrow any more to pay the higher price (they are saving £7.5k cold hard cash and their LTV on purchase price goes down).
I am going to do the numbers properly and have the conversation.
I'm not in a chain and not living in the property so if this blows up the deal... yolo
https://www.gov.uk/guidance/stamp-duty-land-tax-te...
This adds a little more clarity as to the structure.
This adds a little more clarity as to the structure.
NickCQ said:
DaveCWK said:
Would you actually want to renegotiate/ request more money from your buyer off the back of this? Their tax affairs are theirs surely.
Impact of tax on market price is independent of which side of the deal the tax is levied on.The value of the flat (which I still own 100% of with no binding contract to sell) just went up £15k, 50/50 split is more than fair.
Especially as the buyer is already getting a £15k discount versus an agreed offer pre-lockdown and was moaning about stamp (i.e. trying to make it my problem) all the way through the price negotiations.
Obviously your negotiation is what it is & perhaps it makes sense, but as a buyer, I'd tell you my existing offer stood.
This measure is intended to help limit the market downturn, not to produce an immediate uplift!
DaveCWK said:
Not really. Whether the buyer was a FTB, in a chain or a 2nd homeowner would have drastically affected their Stamp Duty obligation, but have zero affect on the market price to the seller.
Market price is determined by average tax incidence, which depends on the mix of buyers looking at a particular property.Hence properties that appeal to FTBs / HTB-ers are most sensitive to changes in those taxes, where as £30 mm Mayfair mansions are affected more by the 3% overseas / second home charge. For this change it is moot as the reduction applies across the board.
Fundamentally I do not believe that the c. £15k windfall should accrue 100% to the buyer.
DaveCWK said:
NickCQ said:
DaveCWK said:
Would you actually want to renegotiate/ request more money from your buyer off the back of this? Their tax affairs are theirs surely.
Impact of tax on market price is independent of which side of the deal the tax is levied on.The value of the flat (which I still own 100% of with no binding contract to sell) just went up £15k, 50/50 split is more than fair.
Especially as the buyer is already getting a £15k discount versus an agreed offer pre-lockdown and was moaning about stamp (i.e. trying to make it my problem) all the way through the price negotiations.
Obviously your negotiation is what it is & perhaps it makes sense, but as a buyer, I'd tell you my existing offer stood.
This measure is intended to help limit the market downturn, not to produce an immediate uplift!
DaveCWK said:
Not really. Whether the buyer was a FTB, in a chain or a 2nd homeowner would have drastically affected their Stamp Duty obligation, but have zero affect on the market price to the seller.
I don't agree, the increase in Stamp Duty for 2nd home owners had a direct impact on the values of holiday homes and BTL flats,NickCQ said:
Market price is determined by average tax incidence, which depends on the mix of buyers looking at a particular property.
Hence properties that appeal to FTBs / HTB-ers are most sensitive to changes in those taxes, where as £30 mm Mayfair mansions are affected more by the 3% overseas / second home charge. For this change it is moot as the reduction applies across the board.
Fundamentally I do not believe that the c. £15k windfall should accrue 100% to the buyer.
You are absolutely correct - renegotiate!Hence properties that appeal to FTBs / HTB-ers are most sensitive to changes in those taxes, where as £30 mm Mayfair mansions are affected more by the 3% overseas / second home charge. For this change it is moot as the reduction applies across the board.
Fundamentally I do not believe that the c. £15k windfall should accrue 100% to the buyer.
If the shoe was on the other foot, and SDLT had increased mid sale, the buyer would.
NickCQ said:
Fundamentally I do not believe that the c. £15k windfall should accrue 100% to the buyer.
I can see why you might feel that way as a seller, but at the end of the day it's the buyers tax bill not yours. I'd think of it as an incentive for them to go through with the purchase given the market uncertainty at the moment, rather than a "windfall" of which half is due to you.V6Alfisti said:
https://www.gov.uk/guidance/stamp-duty-land-tax-te...
This adds a little more clarity as to the structure.
Just found this myself. Not exactly as set out in the policy paper, unsurprisingly, but it does benefit everyone - including, to my surprise, second home buyers and buy-to-let buyers.This adds a little more clarity as to the structure.
Jobbo said:
Just found this myself. Not exactly as set out in the policy paper, unsurprisingly, but it does benefit everyone - including, to my surprise, second home buyers and buy-to-let buyers.
I'm confused now. "The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021."
AyBee said:
It's not a £15k uplift in value if it only lasts until March next year!
Yes it is - their anticipated exit price is the same as if the cut never happened, so the fact that it is temporary doesn't matter.Simply put, let's say market price is £520 and it costs £535 to buy in normal stamp duty environment. Buyer can pay £535 (to me) and no stamp duty and be in the same place (i.e. selling for £520 at some point in the future)
C4ME said:
People thinking they can just put their house up by the value of the stamp duty saving need a dose of realism. This is being introduced due to a faltering housing market and to get more people to show interest at the current prices. It is still generally a buyers market.
I think the government's incentive is as much to stimulate all the ancillary economic activity that goes with house moves rather than to pump up prices.We will see whether I can get my hands on any of the discount. The number of viewings / level of interest I had for the property does not lead me to think it's a buyer's market just yet.
C4ME said:
sambucket said:
Jobbo said:
Just found this myself. Not exactly as set out in the policy paper, unsurprisingly, but it does benefit everyone - including, to my surprise, second home buyers and buy-to-let buyers.
I'm confused now. "The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021."
NickCQ said:
Yes it is - their anticipated exit price is the same as if the cut never happened, so the fact that it is temporary doesn't matter.
Simply put, let's say market price is £520 and it costs £535 to buy in normal stamp duty environment. Buyer can pay £535 (to me) and no stamp duty and be in the same place (i.e. selling for £520 at some point in the future)
Regardless, it'll be good going if you can convince the buyer that selling for £520K after paying £535K isn't losing £15K!Simply put, let's say market price is £520 and it costs £535 to buy in normal stamp duty environment. Buyer can pay £535 (to me) and no stamp duty and be in the same place (i.e. selling for £520 at some point in the future)
You might be OK if you're some way down the line but I would imagine the £500K mark will become a massive psychological barrier even though breaching it only cost a minor sum.
MG CHRIS said:
Currently looking for my first property in wales. Phoned around for various viewings 80% wont allow viewings because people are living in them the other 20% is either empty houses or the estate agent has told the home owner to leave the house for the time of the viewing.
Also have one viewing for next week where I was told you must wear a face mask think I might cancel that one tbh.
The smaller independents seem to be more sensible in viewings where the large chains are playing it by the book from the nut jobs in the welsh assembly.
Not sure Why you can't just wear a face mask ?Also have one viewing for next week where I was told you must wear a face mask think I might cancel that one tbh.
The smaller independents seem to be more sensible in viewings where the large chains are playing it by the book from the nut jobs in the welsh assembly.
NickCQ said:
AyBee said:
It's not a £15k uplift in value if it only lasts until March next year!
Yes it is - their anticipated exit price is the same as if the cut never happened, so the fact that it is temporary doesn't matter.Simply put, let's say market price is £520 and it costs £535 to buy in normal stamp duty environment. Buyer can pay £535 (to me) and no stamp duty and be in the same place (i.e. selling for £520 at some point in the future)
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