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Ok, let us not call it a tax credit. Call it something else. The point is, you need to convince people like me that the lump sum I paid five/six years ago (and for some much more recently) is just gone and now I should start paying again.

I think it is fair that people who have paid stamp duty in the last 10 years (as an example) would receive a rebate toward the next few years of LVT, such that everyone ends up neutral. Not looking for hand-outs, merely to be fair.

I don't buy the argument that I "gain" because the remove stamp duty would be added to the price of the house. Firstly because it is the same argument for pro HPI, which we all agree is rubbish since the next bigger house I buy will be even more expensive. Secondly, part of the point of LVT is to moderate house prices, so I'm not sure they would increase. I'd hope the opposite, certainly at the higher end. 

In any case, the real point is to convince everyone to vote for a LVT you're going to have to add something in so that people who have recently paid stamp duty feel they're being treated fairly and vote for the proposal.

Edited by dugsbody

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The people wouldn't be voting for the proposal though. I can't remember any tax change which was tied to a referendum. The government needs the money, they change the law and start collecting the tax. Simple as that!

 

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6 hours ago, dugsbody said:

Ok, let us not call it a tax credit. Call it something else. The point is, you need to convince people like me that the lump sum I paid five/six years ago (and for some much more recently) is just gone and now I should start paying again.

I think it is fair that people who have paid stamp duty in the last 10 years (as an example) would receive a rebate toward the next few years of LVT, such that everyone ends up neutral. Not looking for hand-outs, merely to be fair.

I don't buy the argument that I "gain" because the remove stamp duty would be added to the price of the house. Firstly because it is the same argument for pro HPI, which we all agree is rubbish since the next bigger house I buy will be even more expensive. Secondly, part of the point of LVT is to moderate house prices, so I'm not sure they would increase. I'd hope the opposite, certainly at the higher end. 

In any case, the real point is to convince everyone to vote for a LVT you're going to have to add something in so that people who have recently paid stamp duty feel they're being treated fairly and vote for the proposal.

"need to convince people..." Well Government taxation doesn't seem to work like that, but ignoring that:

I didn't say you "gain". When you bought your house you had a budget. From your budget you subtracted SDLT to give you max deposit/price affordable. If SDLT was zero your budget would have been the same but prices adjusted higher to offset the previous SDLT charge, subject to potential extra leveraging effect of greater deposit. You or competition would just bid up to new max affordability, and agents/sellers wouldn't sell for less than know buyers can pay.

SDLT doesn't really cost you anything as a buyer - the economic incidence falls on the seller. Many people are buying and selling so it probably mostly nets out there. I don't understand your pro HPI points.

If I was in charge I certainly wouldn't pay off buyers in monetary terms for SDLT when they haven't suffered a monetary loss. But I'm not in charge.

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Article in today's BTLegraph about the "need" to reform Stamp Duty.  Quite a good set of comments already, all help is welcome!

https://www.telegraph.co.uk/tax/news/boris-right-stamp-duty-system-needs-knocked-rebuilt-scratch/

NB article is behind paywall, but you can see all the comments without being a subscriber, and publish your own comments by creating a free user account .  Last time I did this there was no need even to use a valid email address, as they did not use the basis security procedure of sending an email with a verification link....

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This does indicate what the establishment intend to do to "kick start the housing market". It absolutely amazes me that some think the establishment will let prices fall . They will throw whatever they can at this to avoid a nominal HPC and I still think they may succeed for quite a while longer yet.

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8 minutes ago, Pebbles said:

This does indicate what the establishment intend to do to "kick start the housing market". It absolutely amazes me that some think the establishment will let prices fall . They will throw whatever they can at this to avoid a nominal HPC and I still think they may succeed for quite a while longer yet.

Well, they are clearly doing the opposite. Imagine you were thinking about buying a house soon. Why would you do it if uncle Boris is telling you that by waiting you will probably save the cost of Stamp Duty? And they say... only in case of no-deal. Which is actually going to mean that it will be applied in a falling market.

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2 hours ago, Dyson Fury said:

Article in today's BTLegraph about the "need" to reform Stamp Duty.  Quite a good set of comments already, all help is welcome!

https://www.telegraph.co.uk/tax/news/boris-right-stamp-duty-system-needs-knocked-rebuilt-scratch/

NB article is behind paywall, but you can see all the comments without being a subscriber, and publish your own comments by creating a free user account .  Last time I did this there was no need even to use a valid email address, as they did not use the basis security procedure of sending an email with a verification link....

Here's the article:

Quote

 

Imagine three people are vying to buy the same house. It’s a beautiful semi-detached property in Oxfordshire worth £450,000.

The three are at very different stages of life. There’s James, an eager first-time buyer in his 20s, Sally, in her 40s and moving to the area for work, and Colin, enterprisingly looking to grow his buy-to-let portfolio.

All three will pay the same amount for the house, but they will pay drastically different amounts in tax (£7,500, £12,500 and £26,000 respectively). Why? Welcome to Britain’s convoluted stamp duty regime.

It is this that Boris Johnson reportedly intends to shake up in the event of a no-deal Brexit as he vies with Jeremy Hunt to become prime minister.

Reports in today's Times suggest that Mr Johnson plans to drastically raise the threshold for paying stamp duty from its current level of £125,000 to £500,000 at the same time as lowering the top rate from 12pc to 7pc. The reforms would lift entire towns and demographics out of paying stamp duty and breathe new life into the housing market. 

Recent Conservative-led governments – from the coalition to Theresa May’s – have tried to fix the stagnant housing market in increasingly ham-fisted ways. The Help to Buy Scheme, a George Osborne invention, merely served to line the pockets of developers while helping only those first-time buyers who could probably afford a home already. 

How would you change the stamp duty regime? Comment in the box below

When that failed to have the desired effect, Mr Osborne tried to force business-minded property investors such as Colin out of the market by levying an extra 3 percentage points on landlords' property purchases.

Then Philip Hammond, his successor, tried to give the lower end of the market a boost with an exemption for first-time buyers. But even this has failed to significantly boost transactions among this group.

Finally, a Tory leadership contender has suggested a low-tax, conservative policy to fix our housing crisis. But should he go even further?

It’s not entirely clear yet how Boris’s suggestion would play out – and, in any case, it has been proposed only as part of a "no-deal Brexit" emergency Budget – but it would lead to significant savings for all home buyers.

However, asking, say, older people living alone in large homes to pay any duty at all if they downsize will still encourage them to stay put. Getting rid of the tax entirely would truly free up these large houses for the "second steppers", whose small homes would, in turn, be picked up by first-time buyers.

Of course, abolishing stamp duty is unlikely to be popular at the Treasury, as the tax brings in roughly £12bn a year, but research has suggested that reducing stamp duty by just 1 percentage point could boost transactions by 20pc.

After Mr Hammond’s first-time buyer exemption was introduced, the Government’s stamp duty revenues increased. Further reforms of the outdated council tax system could also plug some of the holes.

Boris is right. Stamp duty, and our chronically stagnant housing market, cannot be fixed with incremental changes and tweaks. It is broken. We need to knock it down and start again.

 

 

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  • 261 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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