The "reduce/abolish" Stamp Duty Thread

[renting til I die]

Imagine I buy a house for, say, £275k. What's to stop me giving the seller £249k and offering them £26k for that clapped-out lawnmower in the shed?

Thus avoiding the 3% rate of stamp duty...

I'm guessing that this does happen in some cases, however risky it may be. In fact, I know someone at work who did this when he bought a house for £260k a few years ago. £10k in cash, the rest on the books.

Sorry, again. Can a mod delete please. Going to restart my computer. bah

Edited April 23, 2014 by renting til I die

[The Knimbies who say No]

Maybe, but what evidence can I provide? I can't take these things in isolation and prove them. Death (or expected death) is a big reason, if not the main one, for sales of bigger properties. Stamp duty reduces supply, so if it were removed supply would increase and it is probable prices would fall as a consequence. There are far too many variables to prove any of this in isolation.

You seemed very certain further up the thread, now you're rowing back on it.

Probate sales data ought to be around somewhere. 'Expected death', that's funny. Do you mean sales when someone goes into care eg?

The glaring point is surely that stamp duty levels are irrelevant to sales under probate/care home fees. What power can be exercised to prevent a sale in those circumstances?

[Venger]

Plus the sales fees and moving costs.....3 years rent for me.

Buying is dead money.

[arrgee1991]

You seemed very certain further up the thread, now you're rowing back on it.

Probate sales data ought to be around somewhere. 'Expected death', that's funny. Do you mean sales when someone goes into care eg?

The glaring point is surely that stamp duty levels are irrelevant to sales under probate/care home fees. What power can be exercised to prevent a sale in those circumstances?

The comment regarding death was in response to the sale of larger family homes, and down the years many are sold upon death and divorce. Divorce is less of a factor these days, but death including those taken into care is one of the main drivers behind sales of larger family home.

Stamp duty does not matters to these sales as the owners have no need to purchase hence they still take place. Removing stamp duty would allow those who wish to downsize to do so at a lower cost. Removing stamp duty would mean people who wish to relocate to a property costing exactly the same don't have a large tax bill. Removing stamp duty will increase supply.

The short term effect could be increased prices as people have more to spend on houses but once volumes start to increase then it is likely that prices will fall. Lack of supply, particularly in London, is a cause of HPI. My belief is that the removal or at the very least the reform of stamp duty would increase the supply and should reduce prices. But this government is unlikely to change stamp duty given revenues of £5-£6 billion/annum.

http://www.cityam.com/article/1398300902/uk-deficit-comes-down-tax-revenues-creep-higher

Stamp duty was a particularly supportive revenue for chancellor George Osborne during the year: receipts rose to £1.1bn in March, 44.5 per cent higher than in the previous year. Over the whole 12 month period, revenue from the house sale tax was up 37.2 per cent.

[crashmonitor]

The VIs will argue for stamp duty changes....they want to make it marginal and stick to the present bands....in other words cake and eating it stuff. All this would do is increase the price of mid range properties £250 k +. Presently the lack of a marginal rate acts as a gravitational pull down to 250k on properties that would otherwise sell for up to about 275k.

If you are going to go to a marginal system then you have to bring the 3% band down to 175k so that the changes are house price neutral.

[TheCountOfNowhere]

Stamp duty is just another income tax. Move 3 or 4 times in your life and you've paid another year or 2's income tax.

Higher prices = more profit for banks and more tax.

The people taking your tax money aren't daft.

High house prices have little to do with profiting the people and more with profiting the farming the people. The current scheme is being used to sway older voters and keep their pensions/savings/equity going so the state dont have to cover the costs, for that would mean actually using our tax money for our benefit.

And...people fall for it.

How daft are the British ?

We much need lower taxes and smaller government. There-in lies the solution to our current woes. However, why would the people spending the money they don't earn change their ways until they had to ?

Edited April 24, 2014 by TheCountOfNowhere

[arrgee1991]

Stamp duty is just another income tax. Move 3 or 4 times in your life and you've paid another year or 2's income tax.

...

We much need lower taxes and smaller government. There-in lies the solution to our current woes.

I totally agree with this. Nowadays people move less. I don't know how true it is (as it's the Daily Fail), but apparently the average homeowner now moves once every 22 years, compared to once every eight years in the 1980s, according to recent research by the property firm Hometrack.

http://www.dailymail.co.uk/news/article-2611281/Semi-detached-homes-three-bedrooms-Britains-sought-properties-say-estate-agents.html#ixzz2znfsiQ80

[TheCountOfNowhere]

I totally agree with this. Nowadays people move less. I don't know how true it is (as it's the Daily Fail), but apparently the average homeowner now moves once every 22 years, compared to once every eight years in the 1980s, according to recent research by the property firm Hometrack.

http://www.dailymail.co.uk/news/article-2611281/Semi-detached-homes-three-bedrooms-Britains-sought-properties-say-estate-agents.html#ixzz2znfsiQ80

I thought it was once every 6 or 7 years up until about 2008.

Looking at what's going on now I doubt many of the people rushing to sell at the moment will be moving any time soon.

[arrgee1991]

... the lack of a marginal rate acts as a gravitational pull down to 250k on properties that would otherwise sell for up to about 275k.

It always has. This was the case back in 2001 when I bought for £250K. Properties would go up for sale on Friday and have a few offers on Monday all at £250K and no more. The house I bought was up for £280K, but I made the £250K offer which was initially turned down. After a few weeks of no viewers and probably after the EA advised them we could move very quickly the offer was accepted.