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GreenDevil

Stamp Duty - Cuts coming?

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Will the hamster stick his mucky fingers into stamp duty tax take pie? Personally i think if youre a russian oligarch buying a london pad, you should be prepared to pay 100k up front on a 1.5million purchase to launder your cash.

http://www.standard.co.uk/news/london/london-house-prices-demand-for-stampduty-shakeup-to-boost-central-london-market-a3438836.html

Edited by GreenDevil

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8 minutes ago, Errol said:

Unlikely. Would leave a gaping hole.

As would falling transactions. I can see them setting a cap at the high end, it dosn't really matter to me how much property costs when the elites are selling to each other, be it 5m or 10m the more they do it the more tax they pay. 

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27 minutes ago, Snagger said:

As would falling transactions. I can see them setting a cap at the high end, it dosn't really matter to me how much property costs when the elites are selling to each other, be it 5m or 10m the more they do it the more tax they pay. 

But will a cut reduce prices? It may increase supply which may at least keep prices static. 

TBH im of the opinion that stamp duty isnt the problem for insane price rises, its cheap money from the bankster scum.

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16 minutes ago, GreenDevil said:

But will a cut reduce prices? It may increase supply which may at least keep prices static. 

TBH im of the opinion that stamp duty isnt the problem for insane price rises, its cheap money from the bankster scum.

Cutting stamp duty increases prices. 

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We need proper annual property taxes as we used to have under domestic rates with no caps for high value homes in London.

A Russian oligarch living on his own in a Band H £70m apartment at one Hyde Park pays less than £1000 a year in council tax to Westminster City Council after the 25 per cent single person discount  as the council tax is so low. That's barely two thirds of what a pensioner couple living in a Band D terraced house in Croydon pays.

That is the real joke - our annual property tax is far lower than any other major city for the expensive homes of the global elite and less than most Brits pay in much smaller cheaper homes. No wonder they love it here.

After they have bought their annual tax costs are close to nil.

Edited by MARTINX9

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Monetary stimulus has run out of steam.  It is now the time for fiscal stimulus.  Stamp duty would seem to be a reasonable place to start.  As I've said before, making some debt payments tax deductible would also meet the requirement.

I'd agree with MX9 in that there might also be some tax increases for the wealthy -- but they're not at the point in the cycle where they're trying to balance the books, so they don't need to try to grab too much.  The balancing the books part comes later.

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1 hour ago, BuyToLeech said:

No. 

very insightful thanks. To support my case...lower stamp means higher deposit achievable which is leveraged up increasing fund available for transaction and therefore price in competitive bidding situation. If buying cash not same dynamics at work.

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7 hours ago, BuyToLeech said:

Cutting stamp duty increases prices. 

IMO cutting mortgage costs increases prices. If you make a £200,000 morgage cost 200 per month instead of £800 per month, then obviosuly prices will increase as the disposable income increases.

Stamp duty plays a much smaller part for a familiy home. For an oligarch, who cares if they have to fork out 12%. Let them pay it, they can afford it.

If they want to can house prices, they need to make mortgages more expensive. But anyway that hand will soon be forced as the pound slides further,.

 

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41 minutes ago, Wayward said:

very insightful thanks. To support my case...lower stamp means higher deposit achievable which is leveraged up increasing fund available for transaction and therefore price in competitive bidding situation. If buying cash not same dynamics at work.

True, but there isn't one price for debt-free and another price for cash, the seller doesn't care.  

Bottom line is that houses prices are most set by demand, because supply doesn't respond much to price, and the stamp duty reduces demand at a certain price (it shifts the demand curve). 

In any case, this behaviour has been observed after previous stamp duty cuts, so arguments are moot. 

I was rather hoping someone with a better keyboard and a proper internet connection would flesh out my comment, it's been discussed a lot here in the past. 

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41 minutes ago, GreenDevil said:

IMO cutting mortgage costs increases prices. If you make a £200,000 morgage cost 200 per month instead of £800 per month, then obviosuly prices will increase as the disposable income increases.

Stamp duty plays a much smaller part for a familiy home. For an oligarch, who cares if they have to fork out 12%. Let them pay it, they can afford it.

If they want to can house prices, they need to make mortgages more expensive. But anyway that hand will soon be forced as the pound slides further,.

 

Yes and stamp duty is a mortgage cost, effectively, small or not.

The reason that stamp duty is a bad tax, is because it's a transaction tax.  It encourages,  rather than discourages, hoarding.  

It is still far better than no tax at all.  

Better still, stop people living abroad from buying British houses as investments. There are many downsides to this for the local population, and no benefits. Any government that doesn't do this is clearly working against the interests of its electorate.

 

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57 minutes ago, Wayward said:

very insightful thanks. To support my case...lower stamp means higher deposit achievable which is leveraged up increasing fund available for transaction and therefore price in competitive bidding situation. If buying cash not same dynamics at work.

In the cash purchase case, if the house costs X and stamp duty is 10% then the full clearing price of the house to the buyer is X * 1.10. If stamp duty is cut to 5% then it is most likely that the house will rise 4.7% in asking price so that the new full clearing price remains roughly equal to the original figure of X * 1.10. 

So it impacts both cash and mortgage though as you say, the effect will be amplified in the mortgaged case.

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11 hours ago, BuyToLeech said:

Better still, stop people living abroad from buying British houses as investments. There are many downsides to this for the local population, and no benefits. Any government that doesn't do this is clearly working against the interests of its electorate.

 

This!

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13 hours ago, BuyToLeech said:

Yes and stamp duty is a mortgage cost, effectively, small or not.

The reason that stamp duty is a bad tax, is because it's a transaction tax.  It encourages,  rather than discourages, hoarding.  

It is still far better than no tax at all.  

Better still, stop people living abroad from buying British houses as investments. There are many downsides to this for the local population, and no benefits. Any government that doesn't do this is clearly working against the interests of its electorate.

 

Wherever did you get the idea that the British govt has any concern for the interests of its electorate?

Forty years ago, maybe. Not any more.

CHINESE_10_downing_3478952b.jpg

 

 

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1 hour ago, zugzwang said:

Wherever did you get the idea that the British govt has any concern for the interests of its electorate?

Forty years ago, maybe. Not any more.

CHINESE_10_downing_3478952b.jpg

 

 

Emphasis on the clearly bit.

The government are a bunch of crooks, there's no mystery there. 

What I don't understand - at all - is why the opposition (and the media) aren't beating the government over the head with this every single day. 

It's absolutely perfect for the opposition. It makes the government look anti-British and unpatriotic (which, of course, they are), without having to mention immigration.  

It works on the divide between liberal Tories and conservative tories, it'll sound good to the ex labour UKIPs, and it isn't particularly socialist - it's just common sense.

 

 

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Extract from Theresa May's speech "The shared society: Prime Minister's speech at the Charity Commission annual meeting"

Quote

If you’re young, you’ll find it harder than ever before to own your own home. There are not easy answers to these problems, but it is vital that we come together to address them. For they are all burning injustices that undermine the solidarity of our society and stunt our capacity to build the stronger, fairer country that we want Britain to be." ...

 

That’s why I believe that – when we consider both the obvious and the everyday injustices in unison – we see that the central challenge of our times is to overcome division and bring our country together by ensuring everyone has the chance to share in the wealth and opportunity on offer in Britain today. And that starts by building something that I call the shared society...

 

That’s why we will shortly launch a new housing white paper to boost supply, tackle the increasing lack of affordability, and so help ordinary working people with the high costs of this most basic of necessities...

 

Our plan for a stronger, fairer Britain

And that’s why this government has a plan, not simply to manage our withdrawal from the European Union, but to take this opportunity to fundamentally change Britain for the better.

full speech:

https://www.gov.uk/government/speeches/the-shared-society-prime-ministers-speech-at-the-charity-commission-annual-meeting

 

Reading between the lines, she wants to equalise the housing market to allow everyone an opportunity to get on the ladder. From a government perspective that could include increasing Stamp Duty, reducing Tax breaks on offsetting mortgage interest against income and possibly forcing Letting agencies to scrap fees so that the market becomes more competitive...oh hang on they have done exactly that! maybe Theresa is trying to destabilise the housing market afterall!

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26 minutes ago, crazypabs said:

Extract from Theresa May's speech "The shared society: Prime Minister's speech at the Charity Commission annual meeting"

full speech:

https://www.gov.uk/government/speeches/the-shared-society-prime-ministers-speech-at-the-charity-commission-annual-meeting

 

Reading between the lines, she wants to equalise the housing market to allow everyone an opportunity to get on the ladder. From a government perspective that could include increasing Stamp Duty, reducing Tax breaks on offsetting mortgage interest against income and possibly forcing Letting agencies to scrap fees so that the market becomes more competitive...oh hang on they have done exactly that! maybe Theresa is trying to destabilise the housing market afterall!

After 6 years of Tory government the housing crisis is still raging worse than ever.  Sure they've tinkered, because the problem is so big that they have to be seen to do something.  And yet they don't even take the easiest most obvious step.

'Prime minister - our housing crisis is causing untold misery for millions of hard working British people.  How many of our scarce houses were sold to foreign investors this month?'

'Prime minister, when our British ancestors built the houses of our great capital, did they intend them to be used for money laundering by foreign criminals?'

Etc., etc., and so on. Shooting fish in a barrel. 

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2 hours ago, BuyToLeech said:

Emphasis on the clearly bit.

The government are a bunch of crooks, there's no mystery there. 

What I don't understand - at all - is why the opposition (and the media) aren't beating the government over the head with this every single day. 

It's absolutely perfect for the opposition. It makes the government look anti-British and unpatriotic (which, of course, they are), without having to mention immigration.  

It works on the divide between liberal Tories and conservative tories, it'll sound good to the ex labour UKIPs, and it isn't particularly socialist - it's just common sense.

 

 

The opposition won't complain because they want to be just as crooked when they are elected. There's only one difference between a 'journalist', and a solitary blogger - access. The journalists that reveal what's really going on will never get access again.

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