Stamp Duty - The Worst Tax

MSE_Martin

Thought people in this board may find my latest blog

http://blog.moneysavingexpert.com/2006/12/19/the-uks-worst-tax-stamp-duty/

a good discussion point.

lynzpower

Completely agree martin.

however, I dont see common sense prevailing at the treasury on this one just yet.

nelly_2

Have you put this to Brown at all?

Seeing as they are well aware of you (with the commons motion and all) theres enough of us sat in the pub and on here moaning about it but we aint got no clout, you might have, not that I'm under any illusion it would change anything.

I said on DT recently you should aim some of your skills at the government as they are ripping us off far more than any businesses.

Heres their email addy give some ear ache

[EMAIL="ministers@hm-treasury.gsi.gov.uk"]mailto:ministers@hm-treasury.gsi.gov.uk[/EMAIL]

Alan_M_2

When I first saw the title of this thread I thought, no - Inheritance tax is the worst tax, and Martin covered that in his first sentence.

However, on stamp duty, I don't think they should change the banding, but I think they should stop charging on retrospetcive amounts when you skip into the next band. I do agree that that is nonsence.

So a house sold for £265,000 you pay 1% on the £250,000 (over an above the threshold limit so say the threshold is £150,000 you pay 1% of £100,000) and 3% on the remaining £15,000.

Also the threshold should be set at 10% above annual average house prices at the end of the previous year so the duty is only collected on more expensive properties.

Poppycat

Stamp duty should have been raised much higher, it use to be a tax on the affluent now it has a enomous burden even on those at the bottom of the chain. I agree that it should be a percentage over the threashold and not the full amount.

Another bug bear I just found is the excessive charges on taking a mortgage on or cancelling the old one, it bears no relation I believe in the real costs that the banks insur, and is there for one reason to maximise profits for the banks and to stifle competition.

benood

Stamp duty is a tax on mobility and it is this aspect that is wrong, the bands themselves serve to compound the problem.

How is it fair when someone who is prepared to move around the country for their career gets penalised for their aspiration? Surely this exposes the dreadful cliche "helping hardworking families".

rafraf03

Alan_M wrote:

So a house sold for £265,000 you pay 1% on the £250,000 (over an above the threshold limit so say the threshold is £150,000 you pay 1% of £100,000) and 3% on the remaining £15,000.

Funny that, I was going to suggest the exact same thing!

This is the same way as the PAYE income tax is worked out, and I believe that even if it's not perfect, you have a fairer system as it is continuous: you would not end up paying £5,000 extra tax by adding an extra £1 to a property ....

Not sure about the thersholds, but they should be inline with the average amount of tax paid ...

meanmachine_2

Stamp duty should definitely be kept.

In fact, it should be made much more punitive the further you go up the ladder, in order to "stamp" down on property inflation.

But the current system is crazy.

A friend bought their property for 250K, and has since been advised to put it on for 300K, rather than anything less, so they're not baargained back down to the threshhold.

In many cases, it encourages inflation.

PosterBoy77

meanmachine wrote:

Stamp duty should definitely be kept.

In fact, it should be made much more punitive the further you go up the ladder, in order to "stamp" down on property inflation.

But the current system is crazy.

A friend bought their property for 250K, and has since been advised to put it on for 300K, rather than anything less, so they're not baargained back down to the threshhold.

In many cases, it encourages inflation.

I disagree. The system should be scrapped. What valid reason can there be this day in age with climate change etc high on the agenda to tax people for moving more frequently? No wonder commuting distances have increased, as it can become just too expensive to move house before even taking into account the house price inflation. Speculation would be better dealt with by restricting how much speculators could borrow. There are very few other things you can speculate in as easily without using your own cash.

sanfrancisco

I agree it should be taxed like income tax.

A cynical part of me says do the Government not want to increase the bands, knowing that soon home prices will fall back to their mean and they would then receive next to no tax. No Government would lower bands, once increased.

Greed

Medieval taxes from the days of the medieval king. Nothing more, nothing less.

Modern civilised society should make some bold changes and sort out taxation.