Sheeple Splinter Posted May 27, 2014 Share Posted May 27, 2014 Hi, Firstly, a big thank you to the vast majority of forum posters who have helped to sever my dependence on MSM and provided a useful insight into the financial world beyond my bank statements. I was wondering if it would be better to switch the onus for stamp duty from the purchaser to the vendor? Apologies if this has been discussed before. Quote Link to comment Share on other sites More sharing options...
NorthamptonBear Posted May 27, 2014 Share Posted May 27, 2014 Replace ALL taxes (including BBC licence fee) by Land Value Tax. Land hoarders / speculators get penalised. Catches out all the untaxed foreign companies, individuals and trusts - so a much wider tax base - so the ordinary person has less tax to shoulder. Cheap and efficient to apply. Long successful history, still used in many countries. Dampens property bubbles, lessens rental costs (as there is a cost of keeping land unused or optimised for its level of planning permission). Taxes speculation and property wealth and does not tax employment, labour or indeed non-property capital. Much corruption and evil in the world revolves around land - stealing, clearing poor people, enclosure, Highland Clearances, Pathfinder. LVT helps with much of this. What's the point in stealing land from poor people if you have to pay tax on it? Land cannot generally be made, only improved. LVT should tax the unimproved value of land according to its planning use. Planning is applied for by owner (or anyone actually) but granted by the authorities/community. Farmland pays very little LVT, West London, City of London pays much higher rates. Owner of the land pays - unlike rates/council tax which are paid by tenants and hard for councils to colect. Charity shops often pay 0-20% rates. Hence some charities are paid by landlords to occupy premises to avoid rates! (Payable by landlords after 6 months of being empty). Thus now, industry, shops, employment are stifled with landlords holding out for high rents with little or no cost for an empty shop. With LVT there is an incentive for boarded up shops to be used. Much better than stamp duty, income tax, National Insurance, VAT, CGT... Quote Link to comment Share on other sites More sharing options...
1929crash Posted May 27, 2014 Share Posted May 27, 2014 Hi, Firstly, a big thank you to the vast majority of forum posters who have helped to sever my dependence on MSM and provided a useful insight into the financial world beyond my bank statements. I was wondering if it would be better to switch the onus for stamp duty from the purchaser to the vendor? Apologies if this has been discussed before. In a bubble when a seller is probably making money out of the sale, it is probably fairer to make the seller pay. But if someone is being forced to sell because they can no longer afford the mortgage or something, then that would probably be fairer. So I don't know - probably easier to increase the threshold and keep things as they are. Welcome to the forum btw. Quote Link to comment Share on other sites More sharing options...
arrgee1991 Posted May 27, 2014 Share Posted May 27, 2014 Replace ALL taxes (including BBC licence fee) by Land Value Tax. Mostly agree. Should definitely replace stamp duty and council tax. However if it were the only tax, would mean only land owners pay. Everyone should have something at stake if only to give them a reason to vote. Don't think making sellers pay stamp duty helps anything. For older people wanting to downsize it is disincentive enough to pay all the costs without adding to them. A land value tax that is paid year after year is more likely to create supply. Quote Link to comment Share on other sites More sharing options...
Blod Posted May 27, 2014 Share Posted May 27, 2014 Noticed that Kirsty Allsop wanted to remove stamp duty as it was a tax on moving. At the moment the lower levels of transactions probably makes dumping it easier on the political eye. Land tax would increase commercial activity however it is unacceptable to the elites and hence the political classes. I can't see stamp duty being dumped. Quote Link to comment Share on other sites More sharing options...
katchytitle Posted May 27, 2014 Share Posted May 27, 2014 Taxes create unintended consequences in markets. Moving Stamp Duty to the seller would simply increase the value of houses to enable the seller to cover the cost. This would then mean that Stamp Duty would become part of a buyer's mortgage, and once you are able to borrow for Stamp Duty payments there will be a race to lend and prices will go up. At least in the present system, house buyers need to have saved the stamp duty in cash to stop another credit binge. Capitalism is a great ideal but like any system it is eventually subverted by humans through humanity's own failings. Building relationships in business is an example of that. If we were all rationally economic we would only care about the lowest price for the result we need. However, the models economists build rarely take account of the free events and business development spend which sways human beings decisions. Its not bribery - its business development! :-) Quote Link to comment Share on other sites More sharing options...
Stainless Sam Posted May 27, 2014 Share Posted May 27, 2014 Stamp duty is a brake on house mobility. This sounds like a bad thing, but in reality, at least it's a bit of a disincentive to flit from house to house, gently nudging the price up a little all along the chain. If you have to fund stamp duty by non-mortgage means rather than rolling it into the price it's going to make you think twice. Anyone who can stump up £530k+ for the "average" London house deserves to be bled dry. Stamp duty should be trebled. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted May 27, 2014 Share Posted May 27, 2014 Mostly agree. Should definitely replace stamp duty and council tax. However if it were the only tax, would mean only land owners pay. Everyone should have something at stake if only to give them a reason to vote. Don't think making sellers pay stamp duty helps anything. For older people wanting to downsize it is disincentive enough to pay all the costs without adding to them. A land value tax that is paid year after year is more likely to create supply. why replace?...when you can ADD LVT to the tax manual. Quote Link to comment Share on other sites More sharing options...
keef Posted May 27, 2014 Share Posted May 27, 2014 Anyone who can stump up £530k+ for the "average" London house deserves to be bled dry. Stamp duty should be trebled. Yeah, bloody people with money, eh? Roll on the revolution! Nice to see you posting here though, Mr. Prescott. Quote Link to comment Share on other sites More sharing options...
renting til I die Posted May 27, 2014 Share Posted May 27, 2014 The simplest change would be to scrap stamp duty and put CGT on all houses sold not just investment properties. The good thing about this is it would stop flipping by BTL'ers (and MP's!). How this would affect the housing market overall is hard to tell. I sure vendors would try to add the cost to the sale price but don't they already try to get the highest price possible? and as the price paid is down to what the buyer can borrow, I'm not sure how this would effect asking prices and supply. However I would flavour a more radical change in taxation to LVT as laid out by Northampton Bear. Although, I don't think we could rid ourselves of all other taxes we could get rid of a fair few and certainly lower ones like income tax, possible with a flat income tax system after a initial high threshold level. Quote Link to comment Share on other sites More sharing options...
arrgee1991 Posted May 27, 2014 Share Posted May 27, 2014 (edited) Anyone who can stump up £530k+ for the "average" London house deserves to be bled dry. Stamp duty should be trebled. It's less than the price of a 3 bed terrace in my cheaper part of London. I think young families pay enough without been bled dry. The stamp duty due on my place has gone up tenfold since 2001. Edited May 27, 2014 by arrgee1991 Quote Link to comment Share on other sites More sharing options...
arrgee1991 Posted May 27, 2014 Share Posted May 27, 2014 (edited) The simplest change would be to scrap stamp duty and put CGT on all houses sold not just investment properties. That would pretty much get rid of all supply and stop downsizing. If I had to pay 40% of the profit on the house since 2001, I would never sell. For those who had lived somewhere for forty or fifty years it would near enough be the whole value of the house. If anything it would encourage flipping. I would sell to my neighbour and vice versa every year. Edited May 27, 2014 by arrgee1991 Quote Link to comment Share on other sites More sharing options...
bomberbrown Posted May 27, 2014 Share Posted May 27, 2014 (edited) I was wondering if it would be better to switch the onus for stamp duty from the purchaser to the vendor? This happens quite a lot already. Seen it quite a bit on RightMove. https://www.google.co.uk/#q=%22stamp+duty+paid+by+vendor%22+site:http:%2F%2Fwww.rightmove.co.uk%2F Edited May 27, 2014 by bomberbrown Quote Link to comment Share on other sites More sharing options...
arrgee1991 Posted May 27, 2014 Share Posted May 27, 2014 Taxes create unintended consequences in markets. Moving Stamp Duty to the seller would simply increase the value of houses to enable the seller to cover the cost. This would then mean that Stamp Duty would become part of a buyer's mortgage, and once you are able to borrow for Stamp Duty payments there will be a race to lend and prices will go up. At least in the present system, house buyers need to have saved the stamp duty in cash to stop another credit binge. It effectively gets added to the mortgage anyway. 100% plus loans are effectively the property price plus the duty. With LTV of less than 100% it just means a smaller deposit. Quote Link to comment Share on other sites More sharing options...
arrgee1991 Posted May 27, 2014 Share Posted May 27, 2014 This happens quite a lot already. Seen it quite a bit on RightMove. https://www.google.co.uk/#q="stamp+duty+paid+by+vendor"+site:http:%2F%2Fwww.rightmove.co.uk%2F Maybe when it is the 1% band. HBOS have mortgages where they pay it, but in higher bands, it is not likely to be the case. Quote Link to comment Share on other sites More sharing options...
Rare Bear Posted May 27, 2014 Share Posted May 27, 2014 why replace?...when you can ADD LVT to the tax manual. Now yer thinkin like a politician! Quote Link to comment Share on other sites More sharing options...
Sheeple Splinter Posted May 29, 2014 Author Share Posted May 29, 2014 I was originally thinking it would be 'fairer' for FTB's as they moved up the bedroom echelons and then later in life downsized repaying from any HPI gains. In addition, I thought it could be used as a crude 'windfall' tax. Disturbing realisation that some purchasers who have to borrow to cover stamp duty are then paying interest on it! ( Not up to speed on inserting the posters' comments yet) Probably the worst effect would be that multiple homeowners and the BTL brigade would never sell. Thank you, Northampton Bear, I can see the advantages of LVT and found the following sites informative: 1. YPP Killer arguments against LVT......not! (Can't paste hyperlink ...I'm a muppet!) 2. Land Value Tax Campaign Quote Link to comment Share on other sites More sharing options...
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