Jimmy_James Posted March 23, 2011 Share Posted March 23, 2011 This is the tax cut the landlord lobby has been pushing for for a long time (PricedOut did some work on it when Gordon Brown floated the idea in 2010, see here: http://www.guardian.co.uk/business/2010/mar/15/first-time-buyers-priced-out ) Shapps has just announced on Twitter that this tax cut is going ahead on lower stamp duty for multiple purchasers of new build He said he was spending the weekend with the BTL lobby - seems like it paid off for them. Quote Link to comment Share on other sites More sharing options...
leicestersq Posted March 23, 2011 Share Posted March 23, 2011 This is the tax cut the landlord lobby has been pushing for for a long time (PricedOut did some work on it when Gordon Brown floated the idea in 2010, see here: http://www.guardian.co.uk/business/2010/mar/15/first-time-buyers-priced-out ) Shapps has just announced on Twitter that this tax cut is going ahead on lower stamp duty for multiple purchasers of new build He said he was spending the weekend with the BTL lobby - seems like it paid off for them. Well I know that stamp duty is a very odd tax, with ridiculous marginal rates at the threshold. Why they dont band it like income tax is beyond me. But any move to favour landlords over everyone else is just wrong. I am with you I think, what we should have is a tax on land, that is progressive. So if you are a landlord that owns lots of properties, you get a massive bill each year. It looks though, that there just isnt a strong enough group opposing the systematic landlordisation of this nations living space. Quote Link to comment Share on other sites More sharing options...
57percent Posted March 23, 2011 Share Posted March 23, 2011 Seems odd, but I'm not in the market for a new build, so may bring down the price of older stuff? Quote Link to comment Share on other sites More sharing options...
Nationalist Posted March 23, 2011 Share Posted March 23, 2011 Presumably multiple landlords currently break their purchases into lots of little transactions to get lower stamp duty rates. This is just avoiding them having to do that. Quote Link to comment Share on other sites More sharing options...
Jimmy_James Posted March 23, 2011 Author Share Posted March 23, 2011 (edited) Move confirmed by a happy National Landlords Association: http://nlauk.wordpress.com/2011/03/23/if-at-first-you-don%e2%80%99t-succeed-%e2%80%93-try-try-try-again/ This is a major step in the right direction by Treasury, and a very welcome one from a landlord’s perspective. Put into context, this represents significant potential savings for investor landlords. Edited March 23, 2011 by Jimmy_James Quote Link to comment Share on other sites More sharing options...
sarahleyburn Posted March 23, 2011 Share Posted March 23, 2011 This is the tax cut the landlord lobby has been pushing for for a long time (PricedOut did some work on it when Gordon Brown floated the idea in 2010, see here: http://www.guardian.co.uk/business/2010/mar/15/first-time-buyers-priced-out ) Shapps has just announced on Twitter that this tax cut is going ahead on lower stamp duty for multiple purchasers of new build He said he was spending the weekend with the BTL lobby - seems like it paid off for them. Yep, this was by far the most worrying housing-related part of the Budget, IMO. More here: http://www.mortgagestrategy.co.uk/economy/budget-2011-stamp-duty-land-tax-reform-for-bulk-purchases/1028291.article If the buyer chooses, the rate of Stamp Duty Land Tax on purchases of multiple residential properties will be determined by the mean value of the dwellings purchased, subject to a minimum rate of 1%, rather than their aggregate value as is currently the case.The coalition claims this will reduce a barrier to investment in residential property, promoting private rented housing supply, as well as encouraging investment and exports as a route to a more balanced economy. Quote Link to comment Share on other sites More sharing options...
Blue Peter Posted March 23, 2011 Share Posted March 23, 2011 The coalition claims this will reduce a barrier to investment in residential property, promoting private rented housing supply, as well as encouraging investment and exports as a route to a more balanced economy. Exports?! Peter. Quote Link to comment Share on other sites More sharing options...
exiges Posted March 23, 2011 Share Posted March 23, 2011 (edited) If the buyer chooses, the rate of Stamp Duty Land Tax on purchases of multiple residential properties will be determined by the mean value of the dwellings purchased, subject to a minimum rate of 1%, rather than their aggregate value as is currently the case. Hmm, so if I was say.. buying a £1.9m house in London and liable to 5% stamp duty.. (£95,000) I could also buy a junk property, a caravan in Wales for say £10k, bringing the average down to £950k, and only pay 4% (£76,000) I could then dispose of the caravan at my leisure for what I paid for it and save myself nearly £20k in the process. I can see plenty of "avoidance vehicles" being set up this way. Edited March 23, 2011 by exiges Quote Link to comment Share on other sites More sharing options...
sarahleyburn Posted March 23, 2011 Share Posted March 23, 2011 Exports?! Emigrants? Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted March 23, 2011 Share Posted March 23, 2011 From the link it says: For Example: A landlord buying five properties valued at £200,000 each would currently face a tax bill of five percent i.e. £50,000. Being able to choose to pay SDLT in relation to the average property value means that the one percent rate applies, and therefore the final bill is reduced to £10,000. That is absolutely scandalous. A free £40k for landlords? Quote Link to comment Share on other sites More sharing options...
long time lurking Posted March 23, 2011 Share Posted March 23, 2011 Could it be a just a new incentive to shift the thousands of empty new build flats and make way for more to be built ,I see the one`s to benefit the most will be the housing associations But the empty new builds around my way don`t meet the build standard`s or the size requirement of the HA`s Quote Link to comment Share on other sites More sharing options...
SHERWICK Posted March 23, 2011 Share Posted March 23, 2011 From the link it says: That is absolutely scandalous. A free £40k for landlords? It's not that bad though because, as someone else pointed out above, they can avoid this now by splitting the transactions. It actually makes no sense for them to pay 5% SDLT when the rate for properties under £250k is 1%. Quote Link to comment Share on other sites More sharing options...
The Generation Game Posted March 23, 2011 Share Posted March 23, 2011 Invest in quick-release partition wall companies! Those that can split a £1m house up into 5 x £200k flats. Quote Link to comment Share on other sites More sharing options...
tinker Posted March 23, 2011 Share Posted March 23, 2011 From the link it says: That is absolutely scandalous. A free £40k for landlords? Government going out of its way to help the FTB, so much so there is no need ever to involve them in any discussions. I imagine all governments seem to see the average FTB as the 'greater fool' to help the Ponzi bubble along. Contemptuous. Quote Link to comment Share on other sites More sharing options...
57percent Posted March 23, 2011 Share Posted March 23, 2011 I think this is a non event. If you're buying 5 new builds at 200k each, you pay the 1% on each property, rather than 5% of the total. Makes sense and I doubt anyone ever paid the full amount anyway. Why is there stamp duty on new builds? Don't they already include VAT? Quote Link to comment Share on other sites More sharing options...
tomandlu Posted March 23, 2011 Share Posted March 23, 2011 Government going out of its way to help the FTB, so much so there is no need ever to involve them in any discussions. I imagine all governments seem to see the average FTB as the 'greater fool' to help the Ponzi bubble along. Contemptuous. Indeed - every single measure relating to housing seems entirely aimed at maintaining their 'value'. I can't imagine why - I mean it's not like any major financial institutions' balance sheets depend on high property values... Anyone posted this clip before? Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted March 23, 2011 Share Posted March 23, 2011 I think this is a non event. If you're buying 5 new builds at 200k each, you pay the 1% on each property, rather than 5% of the total. Makes sense and I doubt anyone ever paid the full amount anyway. Why is there stamp duty on new builds? Don't they already include VAT? It says you only pay 1% on one of the £200k properties instead 5% on the £1m invested. Quote Link to comment Share on other sites More sharing options...
Brave New World Posted March 23, 2011 Share Posted March 23, 2011 Pebble dash his site with a HPC message strike: http://www.shapps.com/category/news-and-forum/ Quote Link to comment Share on other sites More sharing options...
exiges Posted March 23, 2011 Share Posted March 23, 2011 I think this is a non event. If you're buying 5 new builds at 200k each, you pay the 1% on each property, rather than 5% of the total. Makes sense and I doubt anyone ever paid the full amount anyway. The old scheme of the total value was silly because buying 5 new builds at £100k each, 1 from 5 developers put you in 1% stamp duty bracket, but buying 5 from 1 developer put you in 4% stamp duty territory. However, the new proposal goes too far the other way and now gives incentives for creative accounting to bring the average property price down to bring you down a stamp duty band or two Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted March 23, 2011 Share Posted March 23, 2011 The old scheme of the total value was silly because buying 5 new builds at £100k each, 1 from 5 developers put you in 1% stamp duty bracket, but buying 5 from 1 developer put you in 4% stamp duty territory. However, the new proposal goes too far the other way and now gives incentives for creative accounting to bring the average property price down to bring you down a stamp duty band or two Could we see country mansions being sold by the room? Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted March 23, 2011 Share Posted March 23, 2011 The old scheme of the total value was silly because buying 5 new builds at £100k each, 1 from 5 developers put you in 1% stamp duty bracket, but buying 5 from 1 developer put you in 4% stamp duty territory. However, the new proposal goes too far the other way and now gives incentives for creative accounting to bring the average property price down to bring you down a stamp duty band or two In the example of 5 x £200k houses why do they pay 1% on an average of £200k? Doesn't the removal of stamp duty below £250k apply? Quote Link to comment Share on other sites More sharing options...
sarahleyburn Posted March 23, 2011 Share Posted March 23, 2011 In the example of 5 x £200k houses why do they pay 1% on an average of £200k? Doesn't the removal of stamp duty below £250k apply? I don't think it does - from what I've read, it's subject to a minimum rate of 1%. Quote Link to comment Share on other sites More sharing options...
live in hope Posted March 23, 2011 Share Posted March 23, 2011 From the link it says: That is absolutely scandalous. A free £40k for landlords? Seems reasonable to me to give a quantity discount. The government has to persuade someone to supply all the homes to the million or so on the social housing list because the government cannot afford to do it. Btl is the only way i am afraid. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted March 23, 2011 Share Posted March 23, 2011 I don't think it does - from what I've read, it's subject to a minimum rate of 1%. Thanks. I'd forgotten about the 1% minimum. Quote Link to comment Share on other sites More sharing options...
tim123 Posted March 23, 2011 Share Posted March 23, 2011 From the link it says: That is absolutely scandalous. A free £40k for landlords? It's not a "free" 40K. they could achieve exactly the same saving by buying the properties separately and all this change does is save the need for extra paperwork tim Quote Link to comment Share on other sites More sharing options...
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