Smiley George Posted June 3, 2021 Share Posted June 3, 2021 Apologies if posted elsewhere, but just picked this up - https://www.thisismoney.co.uk/money/mortgageshome/article-9644175/Government-closes-door-permanent-stamp-duty-cut-saying-8bn-tax-help-recoup-Covid-cash.html So no more ridiculous extensions, but also confirmation that no chance of SDLT reform in the short term. Biggest thing that stands out for me is the potential "cost" to the taxpayer of £8bn WTF were they thinking.....I can think of many, many ways that money could have been used to help this country during the pandemic. But these clowns decided to spuff it on supporting the well-off move house more cheaply, whilst fuelling a boom which will have priced out millions more young people. Just today you have govt infighting and outrage because they're only willing to spend fraction of that on helping our kids catch up on missed education due to the pandemic. Absolute scandal. Quote Link to comment Share on other sites More sharing options...
dugsbody Posted June 3, 2021 Share Posted June 3, 2021 53 minutes ago, Smiley George said: Apologies if posted elsewhere, but just picked this up - https://www.thisismoney.co.uk/money/mortgageshome/article-9644175/Government-closes-door-permanent-stamp-duty-cut-saying-8bn-tax-help-recoup-Covid-cash.html So no more ridiculous extensions, but also confirmation that no chance of SDLT reform in the short term. Biggest thing that stands out for me is the potential "cost" to the taxpayer of £8bn WTF were they thinking.....I can think of many, many ways that money could have been used to help this country during the pandemic. But these clowns decided to spuff it on supporting the well-off move house more cheaply, whilst fuelling a boom which will have priced out millions more young people. Just today you have govt infighting and outrage because they're only willing to spend fraction of that on helping our kids catch up on missed education due to the pandemic. Absolute scandal. I'm not particularly well off. It helped me move, which meant someone else bought my smaller house. The scandal is stamp duty in the first place. We should get rid of it entirely. Quote Link to comment Share on other sites More sharing options...
Smiley George Posted June 3, 2021 Author Share Posted June 3, 2021 4 hours ago, dugsbody said: I'm not particularly well off Anybody spending £500k on a house is not on the breadline. I take your general point re SDLT, it is a hideous tax and the fact there appears little appetite for further reform off the back of the recommendations is very disappointing, but not surprising. Quote Link to comment Share on other sites More sharing options...
hurlerontheditch Posted June 3, 2021 Share Posted June 3, 2021 5 hours ago, dugsbody said: I'm not particularly well off. It helped me move, which meant someone else bought my smaller house. The scandal is stamp duty in the first place. We should get rid of it entirely. there would be riots on the street If a land tax was brought in Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted June 3, 2021 Share Posted June 3, 2021 1 hour ago, Smiley George said: Anybody spending £500k on a house is not WILL BE on the breadline SOON. Quote Link to comment Share on other sites More sharing options...
Smiley George Posted June 3, 2021 Author Share Posted June 3, 2021 13 minutes ago, TheCountOfNowhere said: 😆👍 Quote Link to comment Share on other sites More sharing options...
MonsieurCopperCrutch Posted June 3, 2021 Share Posted June 3, 2021 6 hours ago, Smiley George said: Anybody spending £500k on a house is not on the breadline. I take your general point re SDLT, it is a hideous tax and the fact there appears little appetite for further reform off the back of the recommendations is very disappointing, but not surprising. I don't think £500K is much to spend on a house. Quote Link to comment Share on other sites More sharing options...
Save me from the madness! Posted June 3, 2021 Share Posted June 3, 2021 It is when the average UK household income is about £30k Quote Link to comment Share on other sites More sharing options...
winkie Posted June 3, 2021 Share Posted June 3, 2021 34 minutes ago, MonsieurCopperCrutch said: I don't think £500K is much to spend on a house. All depends on where you buy it, what is costs has little relevance to the quality of life an expensive compared to a cheaper house will give you. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 4, 2021 Share Posted June 4, 2021 Whinge whinge https://propertyindustryeye.com/stamp-duty-tapering-will-not-prevent-substantial-cliff-edge/ Quote Link to comment Share on other sites More sharing options...
Smiley George Posted June 4, 2021 Author Share Posted June 4, 2021 Blah blah blah. This lot are bipolar, last couple of months its been boom time and the VI's have been happily telling all and sundry how great this is, slightest hint of a reverse and they're crying like toddlers. Shut up, suck it up. Quote Link to comment Share on other sites More sharing options...
Trump Invective Posted June 4, 2021 Share Posted June 4, 2021 21 minutes ago, Si1 said: Whinge whinge https://propertyindustryeye.com/stamp-duty-tapering-will-not-prevent-substantial-cliff-edge/ You can always pass it off as "well, they have to have something to write about", but jeez will these people just, I don't know, try to have fun or something? Join a band, or dance in their kitchen at least? It's nearly as bad as contributing 100s of posts to internet forums on the subject! PS from the article: "There is no quick fix for this and I am in favour of a longer tapering over the next year or so to calm the market down, give us all time to think and contribute to the discussion on a longer-term alternative." Time to think? Oh my god. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 4, 2021 Share Posted June 4, 2021 (edited) 12 minutes ago, Trump Invective said: You can always pass it off as "well, they have to have something to write about", but jeez will these people just, I don't know, try to have fun or something? Join a band, or dance in their kitchen at least? It's nearly as bad as contributing 100s of posts to internet forums on the subject! PS from the article: "There is no quick fix for this and I am in favour of a longer tapering over the next year or so to calm the market down, give us all time to think and contribute to the discussion on a longer-term alternative." Time to think? Oh my god. It's almost as if their sales fell off a cliff etc. Edited June 4, 2021 by Si1 Quote Link to comment Share on other sites More sharing options...
Young Turk Posted June 4, 2021 Share Posted June 4, 2021 1 hour ago, Trump Invective said: PS from the article: "There is no quick fix for this and I am in favour of a longer tapering over the next year or so to calm the market down, give us all time to think and contribute to the discussion on a longer-term alternative." Time to think? Oh my god. Did you miss this bit? "Personally, I would like to see SDLT abolished altogether, and I am increasingly swayed that some form of land tax could take its place" Hard to argue with that. Though I think SDLT should remain for 2nd homes (it should probably be much higher than 3% though). Quote Link to comment Share on other sites More sharing options...
Trump Invective Posted June 4, 2021 Share Posted June 4, 2021 1 minute ago, Young Turk said: Did you miss this bit? "Personally, I would like to see SDLT abolished altogether, and I am increasingly swayed that some form of land tax could take its place" Hard to argue with that. Though I think SDLT should remain for 2nd homes (it should probably be much higher than 3% though). Yes true - they'll never agree with any tax though, because of the threat to prices. "some kind" indeed - they havent even got an idea what they want. Quote Link to comment Share on other sites More sharing options...
Young Turk Posted June 4, 2021 Share Posted June 4, 2021 13 minutes ago, Trump Invective said: Yes true - they'll never agree with any tax though, because of the threat to prices. "some kind" indeed - they havent even got an idea what they want. Why do you think he cares about prices? He's a conveyancer FFS! If stamp duty was removed, the cost of moving would be reduced, so people would move more often. If a land tax was introduced, the speculative motive for owning a house would be reduced (buy the big house you'll want in five years now, because it will probably be a lot more expensive in five years; stay in the big house until you die, so that your children get a bigger inheritance; BTL). People would be less likely to buy a big house years before they had children and stay in it for decades after their children left, as there would be a big tax bill for doing so. A knock on effect of this big tax bill would be lower property demand and so lower price appreciation. So he'd benefit from a land tax (the same as most people), so I don't see why he wouldn't want one. Quote Link to comment Share on other sites More sharing options...
Trump Invective Posted June 4, 2021 Share Posted June 4, 2021 2 minutes ago, Young Turk said: Why do you think he cares about prices? He's a conveyancer FFS! If stamp duty was removed, the cost of moving would be reduced, so people would move more often. If a land tax was introduced, the speculative motive for owning a house would be reduced (buy the big house you'll want in five years now, because it will probably be a lot more expensive in five years; stay in the big house until you die, so that your children get a bigger inheritance; BTL). People would be less likely to buy a big house years before they had children and stay in it for decades after their children left, as there would be a big tax bill for doing so. A knock on effect of this big tax bill would be lower property demand and so lower price appreciation. So he'd benefit from a land tax (the same as most people), so I don't see why he wouldn't want one. Im sure you are correct! But why so sheepish about LVT? He is only recently into it, and not very convincingly. He should be shouting LVT from the rooftops! But he isnt. Why is that? Quote Link to comment Share on other sites More sharing options...
bearishonhouses Posted June 5, 2021 Share Posted June 5, 2021 The main reason why TPTB will probably not want to introduce an ad valorem land tax is because of its impact on house prices. Suppose the annual tax is 1% of market value. But market value will be very much lower because of this tax. For example, with no tax, a house sells for 500k. With a 1% annual tax, that is 5k per year. The capitalized value of this outgoing depends on what you think is an appropriate discount rate. Given that capitalized values of inflation linked pensions are, at present, approximately 40 * the annual pension, it seems to me that 40 might be an appropriate multiplier. Hence, the present value of the ongoing tax liability is of the order of 40 * 5k = 200k. And the 500k house would fall by 200k to 300k. (And so of course we have to recompute the present value of the tax stream. At 300k, it would be 120k decline in value. So the actual decline in value would be between 120k and 200k. If you are skeptical about this, consider house values in different markets in the US (try redfin.com). Chicago, Illinois has land taxes of approximately 2% of market value; Atlanta Georgia has taxes at about 1% of market value. Household incomes are similar. Interest rates are identical. For comparable houses/flats prices in Chicago are far lower. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 6, 2021 Share Posted June 6, 2021 6 hours ago, bearishonhouses said: The main reason why TPTB will probably not want to introduce an ad valorem land tax is because of its impact on house prices. Suppose the annual tax is 1% of market value. But market value will be very much lower because of this tax. For example, with no tax, a house sells for 500k. With a 1% annual tax, that is 5k per year. The capitalized value of this outgoing depends on what you think is an appropriate discount rate. Given that capitalized values of inflation linked pensions are, at present, approximately 40 * the annual pension, it seems to me that 40 might be an appropriate multiplier. Hence, the present value of the ongoing tax liability is of the order of 40 * 5k = 200k. And the 500k house would fall by 200k to 300k. (And so of course we have to recompute the present value of the tax stream. At 300k, it would be 120k decline in value. So the actual decline in value would be between 120k and 200k. If you are skeptical about this, consider house values in different markets in the US (try redfin.com). Chicago, Illinois has land taxes of approximately 2% of market value; Atlanta Georgia has taxes at about 1% of market value. Household incomes are similar. Interest rates are identical. For comparable houses/flats prices in Chicago are far lower. Great post Quote Link to comment Share on other sites More sharing options...
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