The budget to change house prices?

dougk_2

Garysletters - I'm not sure that being a landlord is an easy job... I think people under estimate the amount of work that needs to be put into managing properties, finding tenants, dealing with problems etc.

Also without people like you where would all these people be living who complain about house prices and so rent instead of buying. Without smaller lanlords rental prices would certainly be higher with the bigger companies having a monopoly and charging what they want.

I don't think less BTL houses would actually make prices drop much and no stamp duty for FTB's might help for a few months, but I doubt long term if it makes a difference. At the end of the day stamp duty is a small amount in the whole scale of buying a house.

Its not in the governments intrest to make hous prices drop... the higher they are the more money they make (even indirectly through insurance premium tax).

Some people prefer to rent and thats their choice. Taxing landlords will reduce that choice if it causes people to stop renting properties.

In terms of increasing taxes I would rather see new taxes on people who go out binge drinking on a friday or saturday as they cost this country a lot of money in trouble in policing, hospital treatment etc.!

bunking_off

I would have thought that the impact of moving stamp duty threshold to £160K would be to introduce a rather nasty distortion there, as currently happens at the £250k mark. It's nigh on impossible to market a property at £260k because buyers are put off by it being in the higher band...so there tends to be a lot of properties around £250k (or a bit more with a willingness to drop to £250k), then a gap upto £270K. I'd expect the same to occur around the £160k mark. Things would be much better if stamp duty worked like any other tax...0% up to (say) £100k, 1% on any amount above that, 2% on any amount *over* another threshold etc.

As for penalising ownership of 2nd properties - I thought they already did that - CGT is payable on properties other than your prime residence, and if you're a Buy to Let merchant, isn't tax payable on any profit? Tax on tax is IMHO a bad thing. If anything, I'd say Mr Brown seems to be going in the opposite direction to this - don't already announced changes allow you to hold your pension in property as well as shares?

dougk_2

My view is in that I am sure the government wants the housing market to pickup rather than slow down.... I don't think they really care who buys as long as someone buys so they can keep the money rolling in! A drop in house prices would harm the government so they will do everything they can to stimulate it.

MarkyMarkD

rizla01 wrote:

Him Garysletters,

There is one point that I overlooked and that is that you would get a refund on your sales, should it become neccasary to sell up, based on the earlier suggestion of a rise in the CG T level, because you would be able to sell your props for more money since the purchaser will not have to pay CGT on the purchase of your properties. (Assuming that like most investors, your properties are under the £160k mark)

Riz

You mean stamp duty not CGT. Yes, a landlord will benefit from being able to sell property at a slightly better price, if the purchaser would save stamp duty - but this isn't a lot in the scheme of things. Stamp duty is only £1,500 on a £150k house which is not much compared to the CGT a landlord will likely pay if selling at the moment.

michaels

Meddling with taxes can result in these as the last Tory gov't discovered when it removed tax relief on morgage interest to try and reduce a boom - and succeded in increasing it in a scramble to buy.

So what will happen if Stamp Duty thresholds are increased - will it be easier for first time buyers - yes - because it will cost them less to buy houses - no - prices will adjust to what is affordable - ie upwards however it willbe easier to buy as the cost is moved from a pot that has to be saved onto the house price which can be put into the mortgage - so this may increase first time buyers who were previosuly too lazy to save for their deposit etc.

And what if it is more expensive for landlords to hold multiple properties - yes some may be sold resulting in a fall in prices but also with a reduction in available properties an increase in rents...
...but if it becomes expensive for landlords to sell up then they will keep the properties for longer, less sales at less capital gain = less revenue for the chancellor - oops...

michaels

Why?

Why should I pay tax to move house - what is the economic benefit - it means I am staying in a house too small for my family as it would cost too much to move

If I want to move to a similar house elsewhere for a new job, again I must pay - how does this help the economy?

The cynical would say it is because it is not part of the annual tax bill it does not appear in the 'better off / worse off' figures published after each budget...