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FabulousSophie

Stamp duty revenues plunge as housing market freezes

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Some more unintended consequences of rampant house price inflation. The government and journalists must be getting an inkling by now that booming prices have some downsides too (sarcasm intended):

Stamp duty revenues plunge as housing market freezes

https://www.telegraph.co.uk/business/2018/06/23/stamp-duty-revenues-plunge-housing-market-freezes/#comments

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feels like that round here.

Purely down to greed though.

Raise those rates carney me lad no point pumping prices any more....increasing the cost of carry is what is required.

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Put another way. SDLT receipts undershoot by 3% of the proposed extra yearly spend on the NHS.

Wonder if the second resi property 3% surcharge will be scrapped in November on the basis it reduces total amount collected.

Tories are usually fairly pragmatic about doing what is required to get the total tax take up even if they brought this in with some BS about helping FTBs.

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35 minutes ago, ebull said:

Put another way. SDLT receipts undershoot by 3% of the proposed extra yearly spend on the NHS.

Wonder if the second resi property 3% surcharge will be scrapped in November on the basis it reduces total amount collected.

Tories are usually fairly pragmatic about doing what is required to get the total tax take up even if they brought this in with some BS about helping FTBs.

The trouble is that they need to help FTBs out in some way if they want to hold on to power; too many people are priced out (though of course all these policies just keep inflating the market 😦)

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54 minutes ago, ebull said:

Wonder if the second resi property 3% surcharge will be scrapped in November on the basis it reduces total amount collected.

If anything the second residential property 3% surcharge probably increases stamp duty revenue by encouraging second-steppers to sell their first property instead of hanging onto it as a BTL when they move up the ladder.

Buy the next property and sell your current one = 2 sales on which SDLT can be collected. Buy the next property and hang onto your current one = 1 sale on which SDLT can be collected.

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25 minutes ago, Dorkins said:

If anything the second residential property 3% surcharge probably increases stamp duty revenue by encouraging second-steppers to sell their first property instead of hanging onto it as a BTL when they move up the ladder.

Buy the next property and sell your current one = 2 sales on which SDLT can be collected. Buy the next property and hang onto your current one = 1 sale on which SDLT can be collected.

But equally if you already own one property you live in and another which you rent out - the situation for most BTLers, they will think why sell now and pay this tax when I can hold onto it for another 5 or 10 years by which time the tax might not exist any more.

Now if Labour get in and start ramping up the SDLT, or better still do a Nigel Lawson and announce that it will go up next year, there might be a stampede for the exits.

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2 hours ago, Habeas Domus said:

But equally if you already own one property you live in and another which you rent out - the situation for most BTLers, they will think why sell now and pay this tax when I can hold onto it for another 5 or 10 years by which time the tax might not exist any more.

You pay the 3% surcharge when you buy the 2nd (or 3rd, or 4th...) property, not when you sell. People who already have second properties aren't affected so much, it's more a disincentive for people to acquire second properties in the future.

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2 hours ago, Dorkins said:

You pay the 3% surcharge when you buy the 2nd (or 3rd, or 4th...) property, not when you sell. People who already have second properties aren't affected so much, it's more a disincentive for people to acquire second properties in the future.

If someone owns one house they live in and another one they rent out, then if they want to move house for whatever reason, they'll pay the surcharge then? It also rather perversely means that if they decide to keep hold of their earlier owner-occupied house and 'rent it out init' and buy an entirely extra one to move into then they'll pay no more tax than if they'd simply sold and bought in order to move house?

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16 minutes ago, Si1 said:

If someone owns one house they live in and another one they rent out, then if they want to move house for whatever reason, they'll pay the surcharge then? It also rather perversely means that if they decide to keep hold of their earlier owner-occupied house and 'rent it out init' and buy an entirely extra one to move into then they'll pay no more tax than if they'd simply sold and bought in order to move house?

Somebody who already owns 2 or more properties is allowed to buy a new main residence without paying the 3% surcharge as long as they sell the old main residence.

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31 minutes ago, Dorkins said:

Somebody who already owns 2 or more properties is allowed to buy a new main residence without paying the 3% surcharge as long as they sell the old main residence.

Ahhhh. That's good.

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11 hours ago, Dorkins said:

Somebody who already owns 2 or more properties is allowed to buy a new main residence without paying the 3% surcharge as long as they sell the old main residence.

Is that the MP definition of 'main residence' or the pleb version ..

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Stamp duty revenues will pick up when the housing market thaws.

At the moment the housing market is on the cusp.

Sellers don't want to "give" their houses away so they are sitting tight and holding out for the highest price paid in the area +10%, hence volumes are very low. 

When the sellers finally accept that prices are indeed falling, they will start taking lower and lower offers. Volumes will pick up, stamp duty revenues will pick up and prices will tumble.  

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46 minutes ago, Bruce Banner said:

stamp duty revenues will pick up

Not if house prices collapse to a level below which stamp duty does not apply ;)

22 minutes ago, fru-gal said:

a tax on unearned profit

This is a totally propagandised thing to say. There is no such thing as "unearned" income.

When you put your money in the bank, you can earn interest payments on it.  "Earn", because you are delaying gratification and thus doing a service to society by building capital which can be used for investment.

You might say that people who have bought residential properties, thus providing capital for more to be built (in a natural market) have benefited from the State's theft of value from non-owners, but then this is not  "unearned", but stolen income.

Accepting the irrefutable logic there, though, would mean you that have to admit that accepting any benefit from the State is theft, which I guess you don't want to do.

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30 minutes ago, fru-gal said:

CGT [...] (a tax on unearned profit)

And, by the way, if you hilariously think that CGT is a tax on "unearned" profit, this reveals a profound ignorance of both economics and politics.

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2 minutes ago, fru-gal said:

If you bought a house for £50k and it is now "worth" £500k, how was the £450k earned? Certainly not through hard work.

 

58 minutes ago, Locke said:

this is not  "unearned", but stolen income

Did you read the whole response?

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The problem is not just stamp duty, it is estate agents,moving men, solicitors etc not working because people don't want to buy and sell houses. Also extra congestion and pollution because people would rather drive more every day than move  house.

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50 minutes ago, fru-gal said:

If you bought a house for £50k and it is now "worth" £500k, how was the £450k earned? Certainly not through hard work.

A price jump like that implies 20 or 30 years ago. A tiny proportion of 500K houses are bought for cash but realistically you probably had a decent-sized mortgage on that 50K house. You probably did have to work hard to keep up the whacking monthly payments especially in the days of proper interest rates. 

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2 hours ago, fru-gal said:

If you bought a house for £50k and it is now "worth" £500k, how was the £450k earned? Certainly not through hard work.

You didn't earn a thing, the value of money decreased, you still have one house.

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  • 335 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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