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Help! My £1m property is a Stamp Duty prison!

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35 minutes ago, Houdini said:

It’s not stamp duty - it’s just the price...

Stamp duty is way too high at the upper prices which are not uncommon is the SE in particular. For the buyer, value is destroyed. 

Even at lower levels, an average property in London is £500,000 - that's  £25,000 in stamp duty alone. If that ends up in the mortgage, that will extend the life of the mortgage for a couple of years just to pay the tax. 

And yet it is a cost that is lost to the buyer - it is never retained in the value of the property. 

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Scrap stamp duty and add an ongoing LVT that returns roughly the same amount over 15 years. If people move three times in their life, they should work out roughly neutral but at least it's not a transaction tax that stops people from moving. 

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5 minutes ago, Ah-so said:

Stamp duty is way too high at the upper prices which are not uncommon is the SE in particular. For the buyer, value is destroyed. 

Even at lower levels, an average property in London is £500,000 - that's  £25,000 in stamp duty alone. If that ends up in the mortgage, that will extend the life of the mortgage for a couple of years just to pay the tax. 

And yet it is a cost that is lost to the buyer - it is never retained in the value of the property. 

I strongly disagree. First of all, if you think that this house is good value at 1m£... you my friend have been diluted by this massive bubble. Very few people can afford a price like that if they didn’t win the lottery or get the money from HPI, but the offer of similar properties is higher than this demand, I can only see one way for this price to go...

Secondly, when people aren’t paying cash, the main problem is that people have to pay the stamp duty cost with their own money, they cannot finance it using a mortgage without affecting their LTV parameters. It’s not only that the mortgage gets bigger, the condition get worse too.

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By the way, if you make the numbers... the buyer is better off with the new stamp duty up to a value of £937,000 this property hasn’t really seen any increase in stamp duty at all during the last few years. This article is ********.

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"

It's the upsizers who need some help. Without it, the market will remain clogged, with our inability to sell and move, and eventually stagnate. In my road of 20 houses, four of us would-be downsizers have tried to sell in past 18 months — without success.

Nor do I think I was being unrealistic in my sale price. "

 

Hahahahahahahahahaha

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They even managed to get the ‘rent is dead money’ meme in there. Er no it’s not love, not if your house is falling in value faster than what he is paying in rent - and that appears to be the case!

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4 minutes ago, thewig said:

Just bang the value of the property up to cover any shortfalls? It ain’t complicated love

Maybe she could charge prospective buyers a retainer until such time as they can afford the stamp duty? Gotta be creative to survive...

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1 hour ago, Houdini said:

It’s not stamp duty - it’s just the price...

Correct......less saves more and gains more.....agree with some now wanting something smaller more economical to run in a nice place that is their own......less is more........smaller families do not need four or five bedrooms, retiring do not want to upsize they want to downsize to better......few without DIY skills and a surplus income wants a high maintenance blob that leaks money and creates worry that they don't need.......big expensive places require big pockets with big responsibilities...small expensive places, forget it, plenty out there better for less.😉

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1 hour ago, dugsbody said:

Scrap stamp duty and add an ongoing LVT that returns roughly the same amount over 15 years. If people move three times in their life, they should work out roughly neutral but at least it's not a transaction tax that stops people from moving. 

+1000

 

I don't mind paying more tax because I earn more than someone else or have a bigger house.  Why I should pay more because I move more* is IHMO impossible to justify.

 

*I would rather have root canal surgery than move again so a bit academic in my case.

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2 minutes ago, iamnumerate said:

+1000

 

I don't mind paying more tax because I earn more than someone else or have a bigger house.  Why I should pay more because I move more* is IHMO impossible to justify.

 

*I would rather have root canal surgery than move again so a bit academic in my case.

If you move a lot have you considered buying your own bolt hole, lock up and leave and rent in all the places you want to move to or visit......makes better sense.😉

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2 hours ago, Ah-so said:

Stamp duty is way too high at the upper prices which are not uncommon is the SE in particular. For the buyer, value is destroyed. 

Even at lower levels, an average property in London is £500,000 - that's  £25,000 in stamp duty alone. If that ends up in the mortgage, that will extend the life of the mortgage for a couple of years just to pay the tax. 

And yet it is a cost that is lost to the buyer - it is never retained in the value of the property. 

Upto £500K, you only need to pay £10K stamp duty only if you are a FTB or if the property will be your main and only residence.

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Just now, warrior88 said:

Upto £500K, you only need to pay £10K stamp duty only if you are a FTB or if the property will be your main and only residence.

But if you a FTB and have to move you need to pay £15k which seems rather unfair.  Suppose you are a teacher and want to go for a job in a school too far to commute to?

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2 hours ago, Ah-so said:

Even at lower levels, an average property in London is £500,000 - that's  £25,000 in stamp duty alone

It's £15,000. It's 5% but only above £250,000. £125,000 to £250,000 is 2%.

All stamp duty is bad, but it's not too bad until around £1m.

Remove all stamp duty except for additional properties. Set the additional stamp duty surcharge at a sensible level (Not 3%, perhaps 30% or 300%), introduce LVT and tax landlords and landbankers sensibly.

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3 minutes ago, Kosmin said:

It's £15,000. It's 5% but only above £250,000. £125,000 to £250,000 is 2%.

All stamp duty is bad, but it's not too bad until around £1m.

Remove all stamp duty except for additional properties. Set the additional stamp duty surcharge at a sensible level (Not 3%, perhaps 30% or 300%), introduce LVT and tax landlords and landbankers sensibly.

+1

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3 hours ago, Ah-so said:

For the buyer, value is destroyed. 

You support taxation though, don't you?  On the principle that it adds value back to society, so how can you say that payers of tax get back less than they put in?

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11 minutes ago, Kosmin said:

It's £15,000. It's 5% but only above £250,000. £125,000 to £250,000 is 2%.

All stamp duty is bad, but it's not too bad until around £1m.

Remove all stamp duty except for additional properties. Set the additional stamp duty surcharge at a sensible level (Not 3%, perhaps 30% or 300%), introduce LVT and tax landlords and landbankers sensibly.

No £15K only above 500K so, £500,001 yes,. on £500K, it is £10K max.

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51 minutes ago, iamnumerate said:

But if you a FTB and have to move you need to pay £15k which seems rather unfair.  Suppose you are a teacher and want to go for a job in a school too far to commute to?

How is a teacher in the UK ever going to afford a house that has attracts a £15k stamp duty bill?!?!?

 

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2 minutes ago, StuartMc said:

How is a teacher in the UK ever going to afford a house that has attracts a £15k stamp duty bill?!?!?

 

They could have bought it 20 years ago when it was worth £50k!

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  • 140 Brexit, House prices and Summer 2020

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