A subject close to peoples' hearts on here, Stamp Duty......
14 October 2003, 09:21 AM
#1
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Just a little something I read on BBC news, and I thought some on here might like to read this too. Stamp duty dodgers beware......
http://news.bbc.co.uk/1/hi/business/3187892.stm
http://news.bbc.co.uk/1/hi/business/3187892.stm
14 October 2003, 09:48 AM
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Is absolutely ******* ridiculous that the 3% rate applies to houses of 250 and above. Nowadays that makes most houses in London subject to that - should be around 400k to be more realistic.
Thieving *****
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14 October 2003, 09:57 AM
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Yeah, THAT'S where the govt are losing money - it's certainly not the millions they p*ss away on benefit fraud, inefficient NHS etc etc
Considering you can't get a 1-bed flat for less than £100k nowadays, stamp duty really is a p*sstake...
Considering you can't get a 1-bed flat for less than £100k nowadays, stamp duty really is a p*sstake...
14 October 2003, 09:58 AM
#5
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The higher rate should ONLY apply to the amount OVER and ABOVE the levels .............. ie. a £300k house should pay 1% on £250k and 3% on £50k - however, its all paper money .... its all huge profits we have made .... if there was no stamp duty you would just pay extra for the house - so, I guess it all evens out in the wash?
Pete
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14 October 2003, 10:31 AM
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if there was no stamp duty you would just pay extra for the house - so, I guess it all evens out in the wash?
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14 October 2003, 11:58 AM
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b2z of course stamp duty has an effect on the price of houses.. Agents value houses based on what people are prepared to pay, if they had more, generally they would pay more. There must also be a lot of houses worth 260-270 etc which are dropped below the threshold on purpose to attract more potential buyers. If the bands disappeared I think it's fair to say house prices would go up.
14 October 2003, 12:47 PM
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Yeah that only applies for houses around the bracket. I'd hardly call that a general rule. A hell of a lot of the properties in Tunbridge Wells for example are 500k plus and it wont make a blind bit of difference if the bracket was there or not. When someone is spending that amount on a house they arnt looking at how much 3% is gonna cost them as to whether they buy one at £480k or £500k.
I'd also apply it to properties that are below 200k through as well, if I am selling my place I am not basing the price on how much the stamp duty is going to cost the prospective buyer. If the stamp duty wansn't there I am not going to all of a sudden hike the price up, a property is worth what its worth due to location, size, features and maintainability, not how much the stamp duty is.
I just do not agree with the generalisation that house prices are affected by stamp duty, only the ones on the edges of the 250k bracket.
I'd also apply it to properties that are below 200k through as well, if I am selling my place I am not basing the price on how much the stamp duty is going to cost the prospective buyer. If the stamp duty wansn't there I am not going to all of a sudden hike the price up, a property is worth what its worth due to location, size, features and maintainability, not how much the stamp duty is.
I just do not agree with the generalisation that house prices are affected by stamp duty, only the ones on the edges of the 250k bracket.
14 October 2003, 01:45 PM
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A rediculous tax and a rediculous response to the inevitable band avoidance.
A) There should be no stamp duty IMO - it restricts what whould be a free market and is in effect a much higher tax on your capital (which has already been taxed) as it's charged on the debt you're assuming to pay for the property. i.e. you're being taxed on your mortgage as well - so in effect it's easy to see you're really being taxed at 10% (assuming your mortgage is 2/3 property value). Won't take long to lose your capital by moving house, will it?
B) If the lefties insist on this silly tax, then at least get rid of the bands to make it a smooth transition - 1.5% of total price on all property transactions or similar......
Gordo
A) There should be no stamp duty IMO - it restricts what whould be a free market and is in effect a much higher tax on your capital (which has already been taxed) as it's charged on the debt you're assuming to pay for the property. i.e. you're being taxed on your mortgage as well - so in effect it's easy to see you're really being taxed at 10% (assuming your mortgage is 2/3 property value). Won't take long to lose your capital by moving house, will it?
B) If the lefties insist on this silly tax, then at least get rid of the bands to make it a smooth transition - 1.5% of total price on all property transactions or similar......
Gordo
14 October 2003, 02:33 PM
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So you are telling me someone who is considering spending £1m+ on a house then thinks about £30k's of tax as to whether they can afford the property or not? If you have that amount of money just for a house then I can't see how £30k can be a consideration unless going right to the wire on your finances!
14 October 2003, 03:53 PM
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B20 -- you have a very "us and them" attitude. Can you not see that someone struggling to get on the housing ladder would think the same of you?
We were interested in two houses -- one was £255,000 and the other was £249,500. Actually we went for the cheaper one for non-tax reasons, but of course the difference in tax was >£5k. However, someone struggling to get the deposit for a 1-bed flat would surely look at our situation and say "Yeah, but what's 5k on a 250k house?"
Remember that you can't mortgage the stamp duty bit. I'm willing to bet there are plenty of people (on high incomes obviously) who have 85% LTV mortgages on £1 million houses. If they'd saved, say, £200k that would leave £150k for deposit and £50k for improvements, furniture etc. (it costs a lot to furnish and decorate a £1 million house). £30k stamp duty is a huge chunk of that.
We were interested in two houses -- one was £255,000 and the other was £249,500. Actually we went for the cheaper one for non-tax reasons, but of course the difference in tax was >£5k. However, someone struggling to get the deposit for a 1-bed flat would surely look at our situation and say "Yeah, but what's 5k on a 250k house?"
Remember that you can't mortgage the stamp duty bit. I'm willing to bet there are plenty of people (on high incomes obviously) who have 85% LTV mortgages on £1 million houses. If they'd saved, say, £200k that would leave £150k for deposit and £50k for improvements, furniture etc. (it costs a lot to furnish and decorate a £1 million house). £30k stamp duty is a huge chunk of that.
14 October 2003, 03:54 PM
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--'rich' people are often rich because they consider every penny spent and decide if it can be better spent--
Shouldnt they save cash then and buy a caravan instead of a house?
Shouldnt they save cash then and buy a caravan instead of a house?
14 October 2003, 04:02 PM
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Remember that you can't mortgage the stamp duty bit.
14 October 2003, 04:04 PM
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Carl not at all, I'm just buying a place myself and the stamp duty is a killer for me and taking a chunk out of my equity from my current place which is how I am covering it. However it doesn't mean that if the stamp duty wasn't there i'd sell mine for anymore or expect to pay more for the one I was buying.
I agree you'd be able to buy a property that was higher in value but only by the amount of the stamp duty you saved. In todays market that makes little difference in the type of property you can buy, certainly where I live anyway (10k hike in price for example doesn't get you much difference at all).
Any stamp duty when looked at as an individual sum of money is a lot, but in the whole scheme of things when compared to how much you are actually paying for the property then its very small. Still doesn't justify the rip off Government taking it though.
I agree you'd be able to buy a property that was higher in value but only by the amount of the stamp duty you saved. In todays market that makes little difference in the type of property you can buy, certainly where I live anyway (10k hike in price for example doesn't get you much difference at all).
Any stamp duty when looked at as an individual sum of money is a lot, but in the whole scheme of things when compared to how much you are actually paying for the property then its very small. Still doesn't justify the rip off Government taking it though.
14 October 2003, 04:13 PM
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Yes but if you're anything like anyone else, you will have a mortgage and a pot of money. The pot of money pays all the costs associated with moving, then what's left is yours to buy stuff for the new place. The biggest moving expense to come out of that pot of money is the stamp duty: bigger than the solicitor's fees, bigger than the removal fees, bigger than the estate agent's fees, etc. 
BTW of course removal/reduction of stamp duty would cause a corresponding increase in the price of houses -- it's just supply and demand.
BTW of course removal/reduction of stamp duty would cause a corresponding increase in the price of houses -- it's just supply and demand.
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