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Ash4781

Housing Expert Urges Darling To Scrap Stamp Duty For First-time Buyers

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http://www.telegraph.co.uk/money/main.jhtm...08/bdpretty.xml

The Chancellor must scrap stamp duty for first-time buyers in his Budget next week, according to David Pretty, former Barratt chief executive and Government adviser.

Ahead of Alistair Darling's first budget next Wednesday, Mr Pretty has called for a major review in existing stamp duty levels, claiming it would be a "welcome boost to hard pressed youngsters and also to the wider housing market".

The current threshold of 1pc above £125,000 and 3pc over £250,000 amounts to what Mr Pretty labels "an unfair tax", adding around £1,750 to a typical first home and over £7,500 in parts of London and the South East.

He believes the threshold for first-time buyers should be increased to £250,000, a move which would rescue the vast majority from the present "tax trap".

Mr Pretty, who is also chairman of the New Homes Marketing Board, has called on the Government to follow Ireland's example, where stamp duty for first-time buyers has been scrapped.

The NHMS's clarion call does not stop at simply scrapping the stamp duty, however, with Mr Pretty insisting that more must be done to help first-time buyers, said to be worse off than any previous generation.

Mr Pretty has urged the Government to actively encourage savings for deposits as much as five years ahead - as is done in Australia - whilst giving tax relief on parental contributions to their children's homebuying efforts.

Over 50pc of first-time buyers rely on financial help from their parents to pay their deposit, hence the importance of a tax relief in this area.

"As they are so crucial to our economy, it makes good economic, social and political sense to help first-time buyers on a national scale and treat them as a special case," he said.

"I urge the Chancellor to take this opportunity to ease their plight."

;) stamp duty thing didn't work too well in Ireland (see the other thread)

Edited by Ash4781

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Yeah, let's scrap stamp duty and lower IRs and see quite how much effect pushing on a piece of string will have.

Lenders are still not going to return back to 125% LTV and high multiples this side of the London Olympics......

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Ahh yes reduce ftb's costs by 1-3% when the houses are out of there reach for purchasing by 40%. I'm sure there'll be lots of more people entering the market to buy, oh yes i'm sure.

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Ahh yes reduce ftb's costs by 1-3% when the houses are out of there reach for purchasing by 40%. I'm sure there'll be lots of more people entering the market to buy, oh yes i'm sure.

Really, where do they find these people? First time buyer deposits have just risen from -25% to +10%, and we're supposed to believe a 1% tax break is going to help? Come on, I mean, really.

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It will hardly make a difference....

It will make NO difference. Gesture politics at its best! May have made a difference in a rising market - pulled in more suckers, but in a falling market I can't see anyone being persuaded to jump into property ownership just because the government agree to be a little less greedy in a certain area. Where are these people coming from? Ah, I know! The protection from reality that is afforded by parliamentary expense accounts.

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Laughable.

Why the hell should Mr and Mrs Poshy Poshy Rich Rich on 50k each and a £100k nest egg from Mummy get a tax break to buy their Chelsea apartment when struggling Mr and Mrs Low Earner who are struggling to bring up a family and need to downsize from the home they bought as first time buyers last year miss out?

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It will make NO difference.

It will make a huge difference. For a standard semi around here it's around £16,000 that would stay in the buyer's pocket rather than being wasted buying some MP's second or third home (assuming they get rid of the tax for everybody and not just for Labour scum oop North).

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It will make a huge difference. For a standard semi around here it's around £16,000 that would stay in the buyer's pocket rather than being wasted buying some MP's second or third home (assuming they get rid of the tax for everybody and not just for Labour scum oop North).

It will make NO difference to reviving a defunct housing market. £16,000 saving v a potential £16,000+ loss due to falling prices is not going to persuade the potential buyer to jump back into property with both feet.

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It will make NO difference. Gesture politics at its best! May have made a difference in a rising market - pulled in more suckers, but in a falling market I can't see anyone being persuaded to jump into property ownership just because the government agree to be a little less greedy in a certain area. Where are these people coming from? Ah, I know! The protection from reality that is afforded by parliamentary expense accounts.

Darlings speech

"We are not worried about house prices, we have low unemployment, low inflation, low interest rates, and now we have removed stamp duty"

While making a few choice hand gestures.

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It will make NO difference to reviving a defunct housing market. £16,000 saving v a potential £16,000+ loss due to falling prices is not going to persuade the potential buyer to jump back into property with both feet.

But £16,000 will still make a huge difference to the buyer, even if he spends it on something else instead of housing, getting rid of the stamp duty would be great for the economy. They could make it tax neutral by scrapping the BTL capital gains taxbreak at the same time.

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Guest happy?

There is considerable anecdotal evidence that prices cluster around the breaks on stamp duty e.g. you get lots of property at £249999, but nothing much under £280000, what impact would removing the tax have. Perhaps it would eliminate this distortion - but to buyer advantage I doubt.

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But £16,000 will still make a huge difference to the buyer, even if he spends it on something else instead of housing, getting rid of the stamp duty would be great for the economy. They could make it tax neutral by scrapping the BTL capital gains taxbreak at the same time.

Will it? How can a potential saving, the value of which is never exercised, contribute to the economy? It's a mind exercise, and a futile one at that. Or were you being sarcastic?

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There is considerable anecdotal evidence that prices cluster around the breaks on stamp duty e.g. you get lots of property at £249999, but nothing much under £280000, what impact would removing the tax have. Perhaps it would eliminate this distortion - but to buyer advantage I doubt.

IN A RISING MARKET! What is true of a rising market does not hold true in a falling market. Other parameters than the government's take loom far larger.

Edited by Methinkshe

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Guest happy?
IN A RISING MARKET! What is true of a rising market does not hold true in a falling market. Other parameters than the government's take loom far larger.

What you're saying is that stamp duty is only a marginal factor in a falling market, and in a rising market it acts as a brake. Presumably you're not advocating its abolition?

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What you're saying is that stamp duty is only a marginal factor in a falling market, and in a rising market it acts as a brake. Presumably you're not advocating its abolition?

I just think it's a bit neither here nor there in the wider scheme of things. Adjustments in stamp duty are not going to have much effect on the housing market in current conditions. It's a bit like saying that at a major fire the government has decided to swap an X rated fire extingusisher for a z rated fire extinguisher. Yeah, and.....

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I firmly believe that this will happen. All the government have to do is raise a bit of cash to fund it. They could cut petrol duty by 10p, or sell Northern Rock for £110bn, which should be easy, given our strong economy.

(sarcasm meter goes off-scale high)

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Really, where do they find these people? First time buyer deposits have just risen from -25% to +10%, and we're supposed to believe a 1% tax break is going to help? Come on, I mean, really.

I'm sure Labour will make more and elaborate attempts to keep this house price bubble from delfating.

Remove stamp duty for FTB's, these RIDICULOUS Part buy / rent schemes etc etc etc. Anyone take any bets on a U turn over HIPS?

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My guess is that the government will wait until the price of most starter homes has fallen to below the lower rate threshold anyway; then, once that's happened and they've got nothing to lose, scrap it as a vote-winning gesture - probably in the run-up to the 2010 election.

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How would they define first time buyer?

From the sounds of it, the government couldn't scrap duty if it wanted it to. They're going to have to raise the tax take as it is. The drop off in sales over the last two months is worth a billion pounds on an annual basis. There's another billion they have to borrow.

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It will make NO difference to reviving a defunct housing market. £16,000 saving v a potential £16,000+ loss due to falling prices is not going to persuade the potential buyer to jump back into property with both feet.

Agreed, it will be no difference, in a few years time an inner city flat, sorry luxury city centre apartment will be less than £125,000 anyway, the impending HPC is the best way of reducing stamp duty!!

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  • 297 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% +
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      • up 5%



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