Stamp Duty revision 08 July 2020

[MaybeOneDay]

Good evening all,

I've had a quick scan and it doesn't appear that anyone has posted about this as yet.

Apologies if i have been a and missed anything though, please delete mods.

Tomorrow should see the amendment of Stamp Duty regs (a long time coming imo, regardless of the present situation).

I work in conveyancing so the announcement is of interest to me and I am sure no doubt many others on here.

Personally i see one of four things that may happen:

1) Bin it off for six months completely. The best but most unlikely scenario for various understandable reasons.

2) A ceiling of £500,000.00 no duty payable for all. Above this, duty applicable at a percentage.

3) See point two but for first time buyers only.

4) Something different, but leaning more to penalising buy to letters and second homeowners.

I also wonder how it will work for Transfers of Equity etc? I somehow feel this will be left out.

Finally when will they want it back, as the Revenue and the government rarely give something for nothing. Will it be a staggered future payment along the lines of the way Stamp Duty can currently be paid on shared ownership properties, or something different perhaps.

Many of the papers with various models, does anyone have any thoughts/ideas?

[deggles]

I think it will be a temporary raising of the thresholds to £500k for all primary residences (first time buyers or not). I also think BTL and second homes will continue to be charged.

Hopefully Rishi will see sense and bring in any changes immediately, any delay will just cause the market to freeze.

[MaybeOneDay]

deggles said:

I think it will be a temporary raising of the thresholds to £500k for all primary residences (first time buyers or not). I also think BTL and second homes will continue to be charged.

Hopefully Rishi will see sense and bring in any changes immediately, any delay will just cause the market to freeze.

Absolutely agree on the immediacy of it for sure and hopefully he will.

I really am on the fence for BTLs and second homes (I am neither) I think they should get some sort of relief as it all adds to the stimulus, even though there are many valid reasons as to why they should not, these are the types that 'often' have the cashflow for it.

[deggles]

As ever, will be as much a political move as an economic one. The populist view is that BTLs and second homes are for 'the rich', so they will continue to be demonised. Much like the Ltd company directors that have been left out of all the CV-19 support, government can get away with it because public perception is they're all tax dodging millionaires.

[gregs656]

‘Temporary’

Is there a temporary stimulus to the housing market that hasn’t stuck around yet?

Where else can they go from here?

[ITP]

deggles said:

As ever, will be as much a political move as an economic one. The populist view is that BTLs and second homes are for 'the rich', so they will continue to be demonised. Much like the Ltd company directors that have been left out of all the CV-19 support, government can get away with it because public perception is they're all tax dodging millionaires.

This.

In fact to pay for the stamp duty it wouldn’t surprise me if they make the hated limited company directors pay 90% of all future earnings directly to the treasury and hated BTL landlords (just trying to provide for their retirement) pay 90% of their rental earnings directly to the treasury too. Why not? They must be stopped!

[skwdenyer]

deggles said:

As ever, will be as much a political move as an economic one. The populist view is that BTLs and second homes are for 'the rich', so they will continue to be demonised. Much like the Ltd company directors that have been left out of all the CV-19 support, government can get away with it because public perception is they're all tax dodging millionaires.

The current levels of house prices primarily move money from poor to rich, young to old; increased leverage (by owning multiple properties) accelerates that effect. Yes, it is right (at a socio-economic) level to treat BTL very differently to owner-occupiers.

In older, saner, times, BTL properties were not mortgageable, and sold with sitting tenants at a discount to the owner-occupier market thanks to proper security of tenure. We realistically need to get back to that sort of model.

BTW Ltd company directors have not been left out (and I speak as one) - if we chose not to pay National Insurance then it is no surprise that we received no "insurance" payout. If we instead chose to pay NI then we got help. That isn't too hard to grasp Most will still have got a net benefit from the arrangements...

[skwdenyer]

deggles said:

I think it will be a temporary raising of the thresholds to £500k for all primary residences (first time buyers or not). I also think BTL and second homes will continue to be charged.

Hopefully Rishi will see sense and bring in any changes immediately, any delay will just cause the market to freeze.

I think you're right, even if it is a rather daft move IMHO - better to put the money into something useful.

[ITP]

skwdenyer said:

deggles said:

As ever, will be as much a political move as an economic one. The populist view is that BTLs and second homes are for 'the rich', so they will continue to be demonised. Much like the Ltd company directors that have been left out of all the CV-19 support, government can get away with it because public perception is they're all tax dodging millionaires.

The current levels of house prices primarily move money from poor to rich, young to old; increased leverage (by owning multiple properties) accelerates that effect. Yes, it is right (at a socio-economic) level to treat BTL very differently to owner-occupiers.

In older, saner, times, BTL properties were not mortgageable, and sold with sitting tenants at a discount to the owner-occupier market thanks to proper security of tenure. We realistically need to get back to that sort of model.

BTW Ltd company directors have not been left out (and I speak as one) - if we chose not to pay National Insurance then it is no surprise that we received no "insurance" payout. If we instead chose to pay NI then we got help. That isn't too hard to grasp Most will still have got a net benefit from the arrangements...

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.

[anonymous-user]

fesuvious said:

This isn't needed.
To me there is a whiff of influence/cronyism from housebuilders.

The market has bounced back very very strongly.

I agree. This could have been saved for when the market runs out of steam in the Autumn - when furlough gets cut back and the redundancies really start to sting.

[vdn]

If the changes are not immediate; then that’s a big mistake on the government side. It needs to be immediate, as it’ll create a genuine wave of activity.

[Evoluzione]

I don't see the point in speculating until we have some facts which won't be long in coming now.
My OH and I await with interest today's announcement as we're poised to buy so it could save us a large sum. I don't think the vendor is going to be very happy though if the sale is postponed and we're itching to move too.

[vdn]

I’ve exchanged already and complete this Friday! So an immediate change would be massively beneficial to me.

[Byker28i]

MaybeOneDay said:

Absolutely agree on the immediacy of it for sure and hopefully he will.

I really am on the fence for BTLs and second homes (I am neither) I think they should get some sort of relief as it all adds to the stimulus, even though there are many valid reasons as to why they should not, these are the types that 'often' have the cashflow for it.

We're a second home owner, live in Wales, work in England so have two homes. The Welsh govt have rules that allow councils to charge up to 100% extra for second homes, we're told we're 'lucky' our council only charge an additional 50%. It's also an additional 3% stamp duty on top of each band.

Is a stimulus needed for house buyers, theres already many incentives, although many of the new build homes with these seem to attract a premium over equivilant second owner homes in the same area. Is this because houses are seen as an investment that it's thought this is needed?

[JagLover]

skwdenyer said:

The current levels of house prices primarily move money from poor to rich, young to old; increased leverage (by owning multiple properties) accelerates that effect. Yes, it is right (at a socio-economic) level to treat BTL very differently to owner-occupiers.

In older, saner, times, BTL properties were not mortgageable, and sold with sitting tenants at a discount to the owner-occupier market thanks to proper security of tenure. We realistically need to get back to that sort of model.

BTW Ltd company directors have not been left out (and I speak as one) - if we chose not to pay National Insurance then it is no surprise that we received no "insurance" payout. If we instead chose to pay NI then we got help. That isn't too hard to grasp Most will still have got a net benefit from the arrangements...

Yes I think I agree with most of that.

The issue with BTL was more a society wide one of the rich using leverage to drive the prices of starter homes beyond the reach of FTB. They had to take steps eventually before the dispossessed swept the Conservatives out of power. People do not become capitalists without capital.

As for company directors they were entitled to payments through the furlough scheme the same as anyone else. It would be based on the salary going through the business. Those who remunerated themselves primarily through dividends avoided National INSURANCE by doing so.

[Diplomatico]

vdn said:

I’ve exchanged already and complete this Friday! So an immediate change would be massively beneficial to me.

Similar place. Although complete on Fri 31st July. If he increases it to £500k this will be a £15k saving which would be invested straight back into the property doing work we had planned for next year - which is exactly what they want I guess.

[richatnort]

I'm going through the buying process myself at the minute and if i can save 11.5k i will very happy! I'm not trying to get my hopes up as half this stuff is hear say so hoping it does come in though. £500,000 would boost it certainly i reckon i would see far more houses go up around me because of it.

[menousername]

Diplomatico said:

Similar place. Although complete on Fri 31st July. If he increases it to £500k this will be a £15k saving which would be invested straight back into the property doing work we had planned for next year - which is exactly what they want I guess.

Not sure thats what they want - or at least their primary concern

Im with the poster above who thinks the prospective purchasers are not the primary intended beneficiaries here

[Louis Balfour]

anonymous said:

[redacted]

I don't think they'll do that.

It would be too easy for Labour to attack as "helping the rich at the expense of the poor".

Furthermore, the main reasons that they did it in the first place were because sole trader BTLers were not sufficiently visible for tax purposes and too chaotic (in the opinion of government) from a regulatory perspective.

The above, combined with a government that currently makes Jeremy Corbyn look like a raving Tory, I'd be surprised to see any rowing back on the tax relief changes.

[lampchair]

richatnort said:

I'm going through the buying process myself at the minute and if i can save 11.5k i will very happy! I'm not trying to get my hopes up as half this stuff is hear say so hoping it does come in though. £500,000 would boost it certainly i reckon i would see far more houses go up around me because of it.

Same here. We are planning on moving sometime in the next 6mths, but this might make us move a little faster.

Edited by lampchair on Wednesday 8th July 09:08