Stamp Duty revision 08 July 2020
Discussion
Second properties still have to pay the 3% secondary stamp duty so not quite as great as I had hoped.
Higher rates for additional properties
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.
The following rates apply:
Property or lease premium or transfer value
SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%
Higher rates for additional properties
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.
The following rates apply:
Property or lease premium or transfer value
SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%
Joey Deacon said:
vdn said:
Joey Deacon said:
Second properties still have to pay the 3% secondary stamp duty so not quite as great as I had hoped.
But still save on the initial new threshold hike?Do you have a source?
Joey Deacon said:
Second properties still have to pay the 3% secondary stamp duty so not quite as great as I had hoped.
Higher rates for additional properties
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.
The following rates apply:
Property or lease premium or transfer value
SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%
On a £400k 2nd home it saves £10k in SDLT though so not bad.Higher rates for additional properties
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.
The following rates apply:
Property or lease premium or transfer value
SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%
PrinceRupert said:
PopsandBangs said:
Surely sellers are just going to be asking higher prices?
Even if they do, it will be mortgageable, so less up front cash required (especially helpful for a ftb). ITP said:
Tax is just tax whatever you call it, income tax from PAYE, NI, corp tax, VAT etc. It all goes into the same treasury pot. I don’t think ‘insurance’ comes into it, you are only considering one of the many taxes. Ltd company directors pay plenty into the ‘pot’, in many cases more than the equivalent staff member yet have been excluded from CV19 support. Staff don’t pay corp tax or VAT apart from on stuff they buy. It’s like the treasury were saying limited company directors pay no tax at all, so they can have nothing. Which is clearly nonsense.
If they were bothered about just the NI not paid by Ltd company directors (let’s round up to 15%) why couldn’t it be 65% of tax return profits up to £2500, instead of 80% of salary like everyone else?
No, instead it is just ‘nothing for you at all’.
Anyway, back to the question in hand, this stamp duty holiday will most likely be used heavily by property company mates of the government ministers to buy up all the BTL properties being sold by private owners being screwed by the current tax system that is now unfairly biased towards said companies.
Corporation tax is not a tax on a Director's earnings. The Director can earn a full salary, pay just the same marginal tax rates as staff, and declare no Ltd company profits (hence no CT).If they were bothered about just the NI not paid by Ltd company directors (let’s round up to 15%) why couldn’t it be 65% of tax return profits up to £2500, instead of 80% of salary like everyone else?
No, instead it is just ‘nothing for you at all’.
Anyway, back to the question in hand, this stamp duty holiday will most likely be used heavily by property company mates of the government ministers to buy up all the BTL properties being sold by private owners being screwed by the current tax system that is now unfairly biased towards said companies.
VAT is not a tax on a Director's earnings either. It may be a tax on the business. But it impacts all businesses (of a certain size) equally, hence it has an equal effect on the available pot to pay staff.
As I say, amongst other things, I'm a Director of a Ltd company, so I have skin in this game. But I simply don't begrudge the effects, as I believe (and am old enough perhaps) that the social contract is that NI is a premium paid for a potential return.
So we're clear, I've received nothing so far: wrong type of earnings, wrong split of earnings, wrong type of property, wrong size of property, and so on. I'm pretty pissed off about that. But I don't think that bailout based on dividends was the right way to go, even if I might have personally benefitted. But I have no problem with others holding a different view
PopsandBangs said:
PrinceRupert said:
PopsandBangs said:
Surely sellers are just going to be asking higher prices?
Even if they do, it will be mortgageable, so less up front cash required (especially helpful for a ftb). PopsandBangs said:
PrinceRupert said:
PopsandBangs said:
Surely sellers are just going to be asking higher prices?
Even if they do, it will be mortgageable, so less up front cash required (especially helpful for a ftb). If the vendor is now aware you are saving 15k in stamp duty if he/she decides to be an ar@e and ask for another 10k of your15k it could screw you. But they would lose a sale too and potentially bugger up the chain they are moving up if their sale falls through.
PopsandBangs said:
Which I am - but surely I'm limited by LTV and max borrowing? If the house price goes up it prices me out of something i'd have been able to get a mortgage on previously?
Yes, if at limit of affordability, but if you could otherwise have afforded it you now have a bigger deposit so need a smaller mortgage. So worked example.
You had a 57k in cash and were buying a 460k house on a 90% LTV mortgage. 46k deposit, 9k stamp, 2k legals. You no longer have to pay the stamp. You only need 47k in cash, not 56k in cash. You can now afford to to buy a more expensive house as your deposit is now 54k, not 45k. (Notwithstanding it is a bad example as you'd still pay some stamp on a 540k property, but for easy figures) - you can now buy a house for 540k, not previously 460k. This of course assumes you can still get a mortgage on the 540k property - but in London lots are limited by the size of the deposit required rather than salary multiples.
Edited by PrinceRupert on Wednesday 8th July 14:36
bunchofkeys said:
Sorry for being dense, but how is stamp duty calculated above £500,000?
For example if i was to put the house on the market at £520,000, how much would a potential buyer need to pay in stamp duty?
Second home / investment or first home?For example if i was to put the house on the market at £520,000, how much would a potential buyer need to pay in stamp duty?
Check out:
https://www.gov.uk/guidance/stamp-duty-land-tax-te...
In a general sense; you'll pay nothing on the first £500,000 and 5% on anything above... so 5% of £20,000 in your scenario.
skwdenyer said:
ITP said:
Tax is just tax whatever you call it, income tax from PAYE, NI, corp tax, VAT etc. It all goes into the same treasury pot. I don’t think ‘insurance’ comes into it, you are only considering one of the many taxes. Ltd company directors pay plenty into the ‘pot’, in many cases more than the equivalent staff member yet have been excluded from CV19 support. Staff don’t pay corp tax or VAT apart from on stuff they buy. It’s like the treasury were saying limited company directors pay no tax at all, so they can have nothing. Which is clearly nonsense.
If they were bothered about just the NI not paid by Ltd company directors (let’s round up to 15%) why couldn’t it be 65% of tax return profits up to £2500, instead of 80% of salary like everyone else?
No, instead it is just ‘nothing for you at all’.
Anyway, back to the question in hand, this stamp duty holiday will most likely be used heavily by property company mates of the government ministers to buy up all the BTL properties being sold by private owners being screwed by the current tax system that is now unfairly biased towards said companies.
Corporation tax is not a tax on a Director's earnings. The Director can earn a full salary, pay just the same marginal tax rates as staff, and declare no Ltd company profits (hence no CT).If they were bothered about just the NI not paid by Ltd company directors (let’s round up to 15%) why couldn’t it be 65% of tax return profits up to £2500, instead of 80% of salary like everyone else?
No, instead it is just ‘nothing for you at all’.
Anyway, back to the question in hand, this stamp duty holiday will most likely be used heavily by property company mates of the government ministers to buy up all the BTL properties being sold by private owners being screwed by the current tax system that is now unfairly biased towards said companies.
VAT is not a tax on a Director's earnings either. It may be a tax on the business. But it impacts all businesses (of a certain size) equally, hence it has an equal effect on the available pot to pay staff.
As I say, amongst other things, I'm a Director of a Ltd company, so I have skin in this game. But I simply don't begrudge the effects, as I believe (and am old enough perhaps) that the social contract is that NI is a premium paid for a potential return.
So we're clear, I've received nothing so far: wrong type of earnings, wrong split of earnings, wrong type of property, wrong size of property, and so on. I'm pretty pissed off about that. But I don't think that bailout based on dividends was the right way to go, even if I might have personally benefitted. But I have no problem with others holding a different view
ITP said:
Potentially.
If the vendor is now aware you are saving 15k in stamp duty if he/she decides to be an ar@e and ask for another 10k of your15k it could screw you. But they would lose a sale too and potentially bugger up the chain they are moving up if their sale falls through.
It'll be a very dangerous game to play! They would stand to gain a little or lose a lot If the vendor is now aware you are saving 15k in stamp duty if he/she decides to be an ar@e and ask for another 10k of your15k it could screw you. But they would lose a sale too and potentially bugger up the chain they are moving up if their sale falls through.
skwdenyer said:
ITP said:
Tax is just tax whatever you call it, income tax from PAYE, NI, corp tax, VAT etc. It all goes into the same treasury pot. I don’t think ‘insurance’ comes into it, you are only considering one of the many taxes. Ltd company directors pay plenty into the ‘pot’, in many cases more than the equivalent staff member yet have been excluded from CV19 support. Staff don’t pay corp tax or VAT apart from on stuff they buy. It’s like the treasury were saying limited company directors pay no tax at all, so they can have nothing. Which is clearly nonsense.
If they were bothered about just the NI not paid by Ltd company directors (let’s round up to 15%) why couldn’t it be 65% of tax return profits up to £2500, instead of 80% of salary like everyone else?
No, instead it is just ‘nothing for you at all’.
Anyway, back to the question in hand, this stamp duty holiday will most likely be used heavily by property company mates of the government ministers to buy up all the BTL properties being sold by private owners being screwed by the current tax system that is now unfairly biased towards said companies.
Corporation tax is not a tax on a Director's earnings. The Director can earn a full salary, pay just the same marginal tax rates as staff, and declare no Ltd company profits (hence no CT).If they were bothered about just the NI not paid by Ltd company directors (let’s round up to 15%) why couldn’t it be 65% of tax return profits up to £2500, instead of 80% of salary like everyone else?
No, instead it is just ‘nothing for you at all’.
Anyway, back to the question in hand, this stamp duty holiday will most likely be used heavily by property company mates of the government ministers to buy up all the BTL properties being sold by private owners being screwed by the current tax system that is now unfairly biased towards said companies.
VAT is not a tax on a Director's earnings either. It may be a tax on the business. But it impacts all businesses (of a certain size) equally, hence it has an equal effect on the available pot to pay staff.
As I say, amongst other things, I'm a Director of a Ltd company, so I have skin in this game. But I simply don't begrudge the effects, as I believe (and am old enough perhaps) that the social contract is that NI is a premium paid for a potential return.
So we're clear, I've received nothing so far: wrong type of earnings, wrong split of earnings, wrong type of property, wrong size of property, and so on. I'm pretty pissed off about that. But I don't think that bailout based on dividends was the right way to go, even if I might have personally benefitted. But I have no problem with others holding a different view
But, like you say, different views are held, and that’s fine too.
PeteinSQ said:
bunchofkeys said:
Sorry for being dense, but how is stamp duty calculated above £500,000?
For example if i was to put the house on the market at £520,000, how much would a potential buyer need to pay in stamp duty?
£1k I think. 5% of everything over £500k. For example if i was to put the house on the market at £520,000, how much would a potential buyer need to pay in stamp duty?
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