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Massive Stamp Duty Cut For Institutional Buyers

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Torygraph

House prices look set to be boosted by a multi-billion pound new stream of buy-to-let investment by institutions, including Britain’s biggest insurer, prompted by a little-noticed clause in the Budget.

While a good deal of attention focussed on just £250m of new loans, which Chancellor George Osborne said might help 10,000 first time buyers, less attention was paid to reform of Stamp Duty for bulk buyers of residential property. That may sound dull but just wait till you see the figures.

Tax bills for institutional investors and other buy to let landlords could be cut by 80pc if the Budget proposals pass into law. Anyone buying a property portfolio of – for example – 100 homes worth an average of £200,000 each after April 6 would currently face a Stamp Duty charge of £1m or 5pc of the £20m deal value.

They know, that if they let prices crash, they're out in the next election.

Is this going to have an impact....anyone?

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Torygraph

They know, that if they let prices crash, they're out in the next election.

Is this going to have an impact....anyone?

Broken economy won`t support higher rents? If BTL was still attractive/sensible they wouldn`t need to even do this?

Edited by dances with sheeple

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Torygraph

They know, that if they let prices crash, they're out in the next election.

Is this going to have an impact....anyone?

...the '89 HPC came to an end in 1995 when BTL was introduced to the UK for the first time....it appears to be an attempt to kick start HPI....but will it succeed....?...... <_<

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There gone any way, no mention on here but in the budget winter fuel payments have been cut by 50% this year, just when the price of fuel rockets, how many people will die as a result i wonder. Never mind hey.

Scum. At least with Labour the whole system most likely would have needed a reset, but the Tories are going to make certain people suffer more.

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Stamp duty to go back up for FTBs in the Autumn?

2.156 SDLT: relief for first-time buyers – The Government will announce in the autumn the outcome of its review of the SDLT relief for first-time buyers.

A comment about REITS from Merryn's silly Moneyweek article commenting about how good the budget is for FTB (because there will be more rented property as larger landlords have more tax breaks)

The real reason that the budget is bad news for all property buyers is that it is a licence for REITS (Real Estate Investment Trusts) to dominate both the residential and commercial property markets, turning the Nation into tenants. Only 5% of commercial properties are owner occupier. The residential market looks to be going down the same slave route? Soon the number of Britons who own their property will fall below 50%.

REITS already pay no corporation tax, no capital gains tax, and now George is going to let them off most of the stamp duty. The Tories are unashamedly the party of the Rentier Class, who operate parasitically upon the rest of society.

It will not be a level playing field. First time buyers pay stamp duty, tax on renting a room out, inheritance tax at death, and perhaps even capital gains tax if Merryn gets her way.

In time, the whole country will be owned by British Land and a few other major players. But... one day the slaves will rise in revolution!!

http://www.moneyweek.com/blog/the-real-reason-that-the-budget-is-great-news-for-first-time-buyers-00340

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Wouldnt the reset cause more suffering as its effect with be further reaching than just the shores of this country?

Why should we care about other countries, charity begins at home.

Yes more suffering, but it would be fair and spread out and we would 'all be in it together' to coin a ******ing catch phrase.

No way are these clowns going to be voted in next time, they have pissed of the grey vote with inflation and now the winter fuel payments. Plus the mantra of cuts will be shoved right back up their asses.

I reckon a landslide.

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Torygraph

They know, that if they let prices crash, they're out in the next election.

Is this going to have an impact....anyone?

So let me get this straight. Using the above example:-

If an 'institution' wants to piss £20m away on overpriced property just as prices are falling, they will take encouragement from the fact that they can pay £800k less in stamp duty.

The overall effect is to make the transaction 3.8% less expensive than before this change. If property was only 3.8% overpriced they might find this encouraging.

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...the '89 HPC came to an end in 1995 when BTL was introduced to the UK for the first time....it appears to be an attempt to kick start HPI....but will it succeed....?...... <_<

oddly, securitization and CDOs based on MBS were also invented around this time too...I think that had the greatest boost, and BTL was the last bastion...100% no deposit, no proof of any income whatsoever.

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I nominate this bit of the budget as the "Wilsons clause" as it is clearly designed to enable them to offload the BTL empire to an institutional buyer. Fergus & mrs must be dancing around the living room. ;)

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On the contrary I think this will undermine small-time BTLers and bring us closer to a continental style rental market with institutional landlords.

Agreed, and potentially a good thing. Institutional investor should be a bit less likely to invest heavily in a bubble when rents don't make good yields. It might just be a stabilising force.

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Why should we care about other countries, charity begins at home.

Yes more suffering, but it would be fair and spread out and we would 'all be in it together' to coin a ******ing catch phrase.

No way are these clowns going to be voted in next time, they have pissed of the grey vote with inflation and now the winter fuel payments. Plus the mantra of cuts will be shoved right back up their asses.

I reckon a landslide.

^ This.

It would seem to me that the coalition is doing a stand up job of snatching an absolute hiding from the jaws of victory. They are certainly going to have to work hard to get my vote back.

That said, a vote for labour is a vote for cutting off ones nose to spite ones face, so who is the real alternative? I fear the answer is no one, given this nations electorate.

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The sorts of places large insitutional buyers would want are large estates where they can keep the costs of maintenance down. Many in fact will want to develop their own to ensure it is designed in the way they want to run them. In fact it could drive your typical 'amateur' small portfolio to the wall unless they move into niche areas.

Conversely, attracting large institutions into this market won't necessarily drive prices up, but rents down and potentially releasing more of the existing property stock hoarded by the amateaurs to the owner market.

That's substantially incorrect in my opinion

The above is true in a market in replaceable production, but real estate is to a large degree not a market in production it is a market in monopoly. It is the monoply component which is creating the price problem, not the production component. Even if we could build houses for nothing and the maintenance cost were zero, it is unlikely prices would drop at all as a result; the advantage would just transfer into land price.

Edited by Stars

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Before the latest move most properties sold for over £x million paid no stamp duty at all as they were purchased through offshore companies and exempt from stamp duty.

For example, the £15 million property Prince Andrew sold to a Kazak oil baron was done without paying any stamp duty.

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Before the latest move most properties sold for over £x million paid no stamp duty at all as they were purchased through offshore companies and exempt from stamp duty.

For example, the £15 million property Prince Andrew sold to a Kazak oil baron was done without paying any stamp duty.

...true this budget is meant to close that loophole..

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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