Stamp Duty on £250k Plus

Miss_Daisy_3

Advice needed :j

If you buy a property for £250,000 you pay stamp duty of 1% (£2,500)
If you buy a propoerty for £255,000 you pay stamp duty of 3% (£7,650):eek:

Why would anybody put a house up for sale knowing that an extra few thousand for them means a hefty stamp duty fee for the buyer, surely this is a disincentive to buy and would put off many buyers

Can any reassure me that people are well aware of this and only put a price of £255,000 only to expect offers of £250k??

Sorry if this doesn't make sense but it just seems madness to me.

Generali

I would imagine that you are correct but there are some very strange people out there.

Willapp_2

You're right that its unusual to price houses in the £250 - 260k area because of the stamp duty threshold. What normally happens is you get loads of houses at like £249,995 and then a big jump to £265k or above, of houses that are trying to avoid being knocked down under £250k for the stamp duty saving.

If you've seen a house marketed at £255k then I'd certainly make a point of offering under £250k and feel free to be honest about the reasoning - if they really wanted >£250k they should've at least priced it at £260k, if not more.

Best bet is to come in low at like £240k, then work up to £250k if necessary but make a point that you won't go above due to the extra stamp duty making it unaffordable to you.

jaype

Sometimes you can negotiate on a 260+ house so that the vendor agrees to take almost asking price, but agrees to pay your stamp duty. Must be psychological?

peterg1965

I suspect no houses at all sell for between £250K - £260K. It is shocking that so many people will now be caught over the 3% ST threshold and there are going to be more and more as the average house price is now over £200K. Another example of the punitive tax regime masterminded by the bloke at No11.

Miss_Daisy_3

Glad to hear it's not just me who thinks it's bizarre.

I wonder what advice estate agents offer to people trying to sell between 250 - 260K?

Woby_Tide

jaype wrote:

Sometimes you can negotiate on a 260+ house so that the vendor agrees to take almost asking price, but agrees to pay your stamp duty. Must be psychological?

Must be financial you mean. if you accept an offer at £260k and offer to pay the extra 2% stamp duty then you effectively sell for £255k, which is still £5k more than if you sold at £250k in the first place. It's one of the only tactisc to sell a house that is "worth" more than £250k but less than £265-270K

ginvzt

It is just strange to me - why the stamp duty in this case couldn't be paid 1% for the first £250K and only above amount charged at 3%? That would make it £2650 and wouldn't create such a barrier when the house price goes up by even £1. It would also make housing more affordable for those just trying to get their first house when they have to pay stamp duty on £125K.

RufusFrog_2

Miss_Daisy wrote:

Glad to hear it's not just me who thinks it's bizarre.

I wonder what advice estate agents offer to people trying to sell between 250 - 260K?

We had 3 agents who all said that in a fair market our house would be worth £260-265k. Two said ask £259k, but accept £250k. The third said: Try at £275k for a few weeks to see what happens. We went with the third (always the optimists). In three weeks we had three viewings, one of whom offered £255k, then upped to £260k. Which we accepted. And are gladly paying the agent their commission for getting us £10,000 more than we were expecting. Why they agreed to pay £260k is anyone's guess, I suppose it was just the right house for them.

But it seems like a risky strategy - remember we only had 3 viewings.

Let's start a campaign to reform stamp duty!

courtjester

In view of the obscene 'windfall' billions that the government find themselves generating from stamp duty each year, there is absolutely no chance that this or the next government will ever abandon stamp duty - the best stealth tax going. :cool:

Gorgeous_George

It cannot be a stealth tax, we all know about it.

However, if a house sells for £255K, the Government is effectively taking 1% of the first £250K and 103% of the next £5K. We complain about rip-off Britain, banks are forced to repay millions in what are seen as punitive charges. Even council tax bands can be proven to be incorrect.

How long before Martin takes on HMG and gets us our Stamp Duty back?



GG