Stamp Duty "holiday", why do they think it would help?

Max_Headroom_3

I don't understand why the government are considering a stamp duty "holiday" (or abolishing it). How would that "help" the housing market?

Stamp duty on a £200,000 house is 1%, so that is £2,000. Do they really think that making a £200,000 house £2,000 cheaper to buy will suddenly make everything back as it was?

Surely if that is all it took to make a £200,000 house sell then either the owner just needs to reduce the price £2,000 or offer to pay the stamp duty for the purchaser, same effect surely?

And in fact, why are they trying to "help" the housing market? If (as is clearly the case) houses are hopelessly overvalued, why do they want to keep them hopelessly overvalued? It just leads to everyone in a whole heap more debt and a lot less money going into the economy, which is surely what they need isn't it?

Baffled by the whole thing.

dudleyboy

You're absolutely right, Max. The whole thing is ridiculous.

Unfortunately it's just a desperate measure by a desperate government trying to hold on past the next election. Of course, at the first opportunity they'll be out and I suspect they won't be back for a very long time.

The people won't forget the forthcoming legacy of this 'miracle' economy in a hurry.

budget_counsellor_shaz

We had to pay over £8000 for our stamp duty within a month at the end of July, it would have been great if we had been given a bit longer. But it didn't stop us buying the house. It would have been great if we could have been given longer to pay it though.:rolleyes:

It is so good to have all our things back out of storage (after a year) and to be able to do what we want in our own house again:o

moanymoany

I blame Krusty and Phil - everlasting banging on! They must be feeling so smug now. Bet Krusty's sitting in Daddy's country pile - enjoying her weekend in the country - glowing in a condescending glow of thing!!!!

GGGGRRRRRRR

Barneysmom

Yes, I'd rather they binned the HIPS.
It scared me into taking my house off the market, seemed like a lot of money to spend on something a surveyor and solicitor should see.

tomstickland

I don't understand what a stamp duty holiday would achieve either. I also don't think that desperate attempts to "revive" or "kick start" the housing market will achieve anything and could possibly be a total waste as they simply postpone the inevitable.

Maybe it was very simple - the government wanted to appear to announce a tax cut and realised that with very few houses selling then stamp duty would be an easy one.

daveyliver

I just thinks it encourages people to overstretch themselves again.

Couple could see it as a way of offering more on a property, then four months later (or however long) a bill pops through the door saying hey remember we let you defer that 4 grand you owe us?, well we want it by the end of the month or we will see you in court.

bo_drinker

moanymoany wrote: »

I blame Krusty and Phil - everlasting banging on! They must be feeling so smug now. Bet Krusty's sitting in Daddy's country pile - enjoying her weekend in the country - glowing in a condescending glow of thing!!!!

GGGGRRRRRRR

Somebody find the keys to daddys gun cabinet sharpish:mad:

moanymoany

I think the HIPs should go. Some chap came and did the energy survey which no-one seemed to take any notice of. However, the searches were useful.

It was one of those ideas that seemed good at the time, but that no-one though through!

In most other EU countries the cost of buying a house is about 15% - 20%. Maybe this is one reason why their housing markets are not crazy, people save for and buy a 'home'. They do not move constantly to get 'up' the ladder. They also have a different attitude to 'personal debt'. In France, for example - credit cards have to be paid at the end of the month.

I taught several Germans and they said that in Germany houses tended to rise with inflation, people certainly didn't buy them expecting the value to double in a few years!

neverdespairgirl

jeepjunkie wrote: »

I thought Kirsty and Phil were on the buyers side and always got a good deal by going in with low offers ???

Are you not thinking of grand designs etc

Grand designs isn't about buying places, it's about building them.

I've not seen Kirsty n Phil much, but from what I've seen they get all excited about offering a "cheeky" £495k on some overpriced hell-hole on for £500k.

Romani_Ite_Domum

Stamp duty is real money that disappears from the housing market to the government. It neither benefits the buyer or seller.

As much of the “boom” has been caused by very lax lending, the return of normality to lending practices (now called a credit crunch) has meant that FTBs are now priced out of the market.
One of the reasons they are priced out of the market is the amount of deposit that they have to find.

If a purchaser can get a LTV of 85% on a £200K property and no longer has to pay stamp duty, the purchasing power increases by around 6.5 %. If a LTV of 90% was available, removal of stamp duty would increase purchasing power by 10%. This, in theory could provide some liquidity into the housing market.