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MSE News: Calls to extend stamp duty concession

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This is the discussion thread for the following MSE News Story:

"The mortgage industry is disappointed the Government plans to end the stamp duty 'holiday' for first-time buyers ..."
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Comments

  • Caveat_Mortgagor
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    First time buyers best interests are not served by little measures which merely serve to encourage them to pay insane prices. They would be better served by allowing prices to fall to a level at which the market can support itself, giving the buyer long term security that they will get their money back if and when they ever decide to sell.

    Its clear we are not at that level presently as we need record low interest rates to avoid half the country being repossessed.

    So, just to be contrary, perhaps the threshold is too high! The threshold was increased when the disconnect between salaries and house prices really took hold.

    How about ramming home to first time buyers a reminder of just how much they are spending by setting the lower threshold at 3.75 times uk average salary?

    For me the only matter for debate should be 3.75 times earnings or 4 times earnings?
  • Caveat_Mortgagor
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    ed666 wrote: »
    As potential first time buyers in the south east, a 200k-250k is a ballpark figure that we are considering spending. Hardly extravagant!

    The reintroduction of stamp duty will put us back by a few months saving another 5k....but not deter from our long term plans. However to some it will take considerably longer to source extra funding.

    I would expect the reintroduction would help those selling properties in the 250-280k bracket as their all-in price inclusive of stamp duty would now be considerably closer to those sub-250k.

    5k? I think you need a calculator

    On a side note, the country is skint. It needs to raise revenue from taxes. A progressive tax system will levy according to ability to pay.

    If the exchequor can squeeze a couple or 3 grand out of you causing you only a few months inconvenience i think they will see that as good business as you clearly have the ability to pay the tax and they clearly need your money.

    What makes you think you should get away with such a large tax demand in order to save you a couple of months wait?
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
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    ed666 wrote: »
    The reintroduction of stamp duty will put us back by a few months saving another 5k....but not deter from our long term plans.
    It's 1%, so only an extra 2.5k max that you'd need.
  • gmang
    gmang Posts: 171 Forumite
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    Who cares? Just pass on the 1% reduction to the vendor. House prices are already falling at that rate each month.
  • JimmyTheWig
    JimmyTheWig Posts: 12,199 Forumite
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    A progressive tax system...
    Not sure I'd call it progressive.
    1. Why does it need to have jumps in it? Why not just make the higher rates applicable to the portion in which they are relevant to in the same way as income tax brackets work?
    2. Why should someone who buys a large house and stays there for years pay less than someone who buys a small flat, then sells it to buy a large flat, then sells it to buy a small house, then sells it to buy a medium sized house?

    Doesn't sound very fair to me.
  • wymondham
    wymondham Posts: 6,354 Forumite
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    The Government needs to do exactly what it is doing - re-introduce stamp duty as it made no difference, but lost revenue. The Govt needs to keep their nose out of the house buying process to allow it to find a reasonable level. Each time a scheme is introduced it props up prices and causes more problems........
  • Caveat_Mortgagor
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    Not sure I'd call it progressive.
    1. Why does it need to have jumps in it? Why not just make the higher rates applicable to the portion in which they are relevant to in the same way as income tax brackets work?
    2. Why should someone who buys a large house and stays there for years pay less than someone who buys a small flat, then sells it to buy a large flat, then sells it to buy a small house, then sells it to buy a medium sized house?

    Doesn't sound very fair to me.

    I was being flippant, but i will try to answer your Q.

    I am not sure its clearcut that the ones buying the big house right away would pay less tax than someone who moves a further 3 times.

    These figures probably wont stack up in the sarf, but ooop north, imagine the first two purchases are below the threshold to pay SD, then 2 purchases at 1% each time. Total tax paid might be £3k.

    Compare that to someone buying at £300k and paying SD for just buying and staying - total paid £9k.

    To answer your first point - if the tax was bracketed then the £300k purchase would pay only £2750 tax. Since you had the worry about a rich person buying the house they wanted at the first time of asking rather than climbing a ladder and paying tax on various moves, I ask you would you prefer it if that person paid only a third as much tax?
  • ed666
    ed666 Posts: 6 Forumite
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    It's 1%, so only an extra 2.5k max that you'd need.

    Slight miscalculation on my original figures....in that case....I don't think it'll make much difference!
  • razam
    razam Posts: 131 Forumite
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    The Stap Duty brackets will become virtually irrelevant for FTB in London (like me) after March, if the concession is removed.
    Even with the concession, it only provides benefits to FTBs buying 1/2 bedroom flats. I think there should be a different price-bracket scheme for London - maybe increased by 50k or so.
  • Caveat_Mortgagor
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    razam wrote: »
    The Stap Duty brackets will become virtually irrelevant for FTB in London (like me) after March, if the concession is removed.
    Even with the concession, it only provides benefits to FTBs buying 1/2 bedroom flats. I think there should be a different price-bracket scheme for London - maybe increased by 50k or so.

    How about a different currency as well?
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