What is stamp duty for??

pinkshoes

pukkamum wrote: »

my husband and i were talking about this today and as far as can see we pay tax on what we earn if we want to save for a house we pay tax on our savings and then when we buy the house we pay tax again!!! three lots of tax on the same money!!!!

That's because if you took all the taxes that we pay on everything, then just paid it on our salary, then we would probably all have heart attacks at the amount due, and the NHS bill would go up due to having to treat all the heart attack victims!

They slap a bit on everything so the blow doesn't see so bad.

Alfie_E

vicky_kidder wrote: »

I know it is meant to be a tax of some sort, but a tax on what?

That’s a very good question. Stamp duty is a tax on documents. The name comes from the fact that documents often had to be stamped after production or had to be produced on pre-stamped paper or other material. Most stamp duty, certainly in more recent times, has been on legal documents. If the document isn’t stamped, it won’t be recognised by a court. So, in that sense, stamp duty is a tax on legal recognition.

With the recent introduction of Stamp Duty Land Tax and Stamp Duty Reserve Tax, stamp duty has moved even further from its origins. These are designed to deal with the fact that most share transfers are already done completely electronically and most property transfers soon will be. This makes stamp duty more abstract, because it’s very difficult to stamp an electron. However, the transfer of shares held in paper form is still governed by the 1891 Stamp Act. Share transfer documents have to be stamped for a valid, legal transfer to occur.

Microstar_2

lonestar1 wrote: »

Originally only very big expensive house sold for over 125k so it was a tax on the very rich. Over time houses went up in value and the government began to see larger and larger cash generated via this tax and as such became less keen on raising the threshold this went on and on until were now in the stage where anyone buying an average house now has to pay

Incorrect!
Stamp duty used to start at much lower levels.
In the early 1990's it was at £30k (a small semi costing anything from £40-70k in my part of the world at that time). In 1991 we were in the grip of a big downturn, as now. With an election looming in '92, Norman Lamont ( chancellor) suspended stamp duty for all but properties over £250k. John Major got back in in '92 and SD was brought back in with a £60k threshold.

sdooley

At least in this country you don't have to pay VAT on your house like in some countries. They talked about doing it in 2002 and it would have avoided all this mess we're now in: http://news.bbc.co.uk/1/hi/uk_politics/2586189.stm

The higher the tax on the transfer of houses the more people are likely to buy them to live in for life rather than as a trading investment. We have the cheapest transaction costs for buying and selling property in Europe, the lowest taxation on buying and selling residential property, the most generous tax regime for setting off interest against profit on let properties in Europe and, until recently, one of the most generous mortgage markets to buyers.

Reducing the incidental costs of buying houses inflated the bubble, but that's ok because inflation will be allowed to let rip to pay off everyone's mortgages for them. No wonder no-one's interested in doing productive work when their house pays the way for them.

Austin_Allegro

Tax is needed for the government to create jobs in order to provide employment for people who would otherwise be on the dole, which would require tax to pay for it.

Er...does that make sense? :rotfl:

vicky_kidder

Lol, thanks for everyones replies! Soem have made me giggle (austins last one!) and some have made me feel outraged that we have to pay it (pukkamums)!

But I guess theres no getting round it. It's so frustrating that I have to pay them money for really nothing at all - I don't remember getting a phone call asking if I needed any help looking for a house or sorting out a mortgage!!!

clutton_2

""What is stamp duty for??""

MPs jollies ....... and mistresses ........ and second homes ........ and IKEA kitchens .............. and food ............etc etc etc

lincroft1710

Pukkamum - you forgot one!

When you employ a decorator to decorate it or a plumber to repair leak you pay govt 17.5% of their bills - VAT.

Sorry I think there's another one - when you insure it, isn't there 5% insurance tax!!!

And of course everybody's annual favourite - COUNCIL TAX !!!!

vicky_kidder

lincroft1710 wrote: »

Pukkamum - you forgot one!

When you employ a decorator to decorate it or a plumber to repair leak you pay govt 17.5% of their bills - VAT.

Sorry I think there's another one - when you insure it, isn't there 5% insurance tax!!!

And of course everybody's annual favourite - COUNCIL TAX !!!!

Gosh, it is a surprise people have any money left after giving most of it to the government!!

Wonder what percentage of our monthly salaries we give to government in one way or another?

bagby

Just thought I had read in one of the papers that government are not paying stamp duty to houses up to £175,000 for twelve months starting tomorrow.