Monday, Jun 07, 2010
Shaky foundations
MSN Money: Will CGT and HIPS trigger a second house price crash?
There are already plenty of reasons to expect prices to fall again, but now, everyone is talking about two new events apparently about to whack the market.First, there's last month's scrapping of Home Information Packs (Hips). Then there's the likely big rise in capital gains tax (CGT).
Posted by little professor @ 11:24 PM (2137 views) Add Comment
12 Comments
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1. dill said...
I've frequently gone on about HIPS being a deliberate supply dampener. The mainstream railed against them, but little knowing that the abolition would be against their VI. Now they know.
2. gone-to-colombia said...
Clear and well argued article.
Interesting, the points made about HIPS, I had not considered these to be such a drag on new properties being placed in the market.
But, I have noticed many more being placed upon the Rightmove site.
A few are starting to look interesting.
3. i remember the 90`s said...
I used to think great my house is going up in price(made me feel better off)but over the last year i have come to realise i don`t want this ,i mean what about the next few generations (my kids included)they will all want to live somewhere within their means so come on lets drop 50% lets give all our youngsters a chance !!!!!!
4. bluebeach said...
Err...... when did the first happen then?........ get real.......
5. str 2007 said...
It always amazed me how a £300 HIPS pack would stop someone selling their house (unless of course it was a pile of 5h1t), (which alot are).
However I can see the reasoning in this article.
Lets hope they go for the 40% and give them until next April.
Having said that, what is to stop you transferring the holiday home to your children who wouldn't have to sell for another 40 years or so.
Maybe in actual fact this could lead to 'family trust property portfolios'. Slowly building an abundance of rental properties that members of the family can holiday in free of charge.
Maybe Mark Wadsworth is better qualified to answer that one.
I see alot of loopholes coming,
6. dill said...
@4 bluebeach
Since about 20/05/2010, I believe.
7. mark said...
I think the public spending cuts will have more of an impact on the market, many people will struggle to keep their homes
8. jack c said...
The World Cup is the next likely excuse coming up for a lack of interest in residential property over the Summer months - they are already widely talking about it on the radio - "people will be taking time off work" - "everyones going to be drinking more from Friday" - no mention of course of the fact that house prices are too high and the affordability factor will ultimately choke the market.
9. mark wadsworth said...
@ STR, if you wanted to avoid CGT on the gain on properties you already own, then there would be a heck of a lot of tax law to re-write, as a general rule, CGT is payable on any transfer of a property (except main residence, of course), e.g. from an individual to a trust or from parent to child, and with trusts there is a lot of Inheritance Tax nastiness going on. And using a company is no good because you get a benefit in kind charge if you live in it.
10. growler said...
@ Jack C
All Estate Agents have always dredded Wimbledon (Tennis) as the end of the years market - even in the "good" times. With the World cup happening, it won't help the Estate Agents. Which is good reason enough to celebrate already.
With all the austerity in UK and overseas, even the gravity defying property market will be severely undermined and we get into Credit Crunch mark 2
11. jack c said...
@ growler - the World Cup and the Wimbledon tennis championships (Andy Murray run to semi's) a perfect set (puns intended) of Summer excuses for a double drop in housing activity.
I also agree that the measures in the UK and abroad to reduce deficits (little mention of the actual debt) will surely mean that residential prices can no longer defy gravity.
12. str 2007 said...
Thanks for that MArk
No dodging the CGT then.