Stamp Duty – can you fix Britain’s worst tax?

edgex

Why the insistence on continuing the banding system? Thats the part of the existing system thats broken.

Its really simple;

one flat rate applicable to all property purchases
(the same way that vat is applied)

thelawnet

edgex wrote: »

Why the insistence on continuing the banding system? Thats the part of the existing system thats broken.

Its really simple;

one flat rate applicable to all property purchases
(the same way that vat is applied)

Not really.

It is well-established principle in this country that the better off pay not just more tax but higher rates of tax.

This applies to income tax, air passenger duty, and indeed to expensive houses.

Having just established a 7% tax on £2m+ houses, as those people can clearly afford to pay that much, it's absurd to imagine they will henceforth just tax everybody at say 2%.

aggrieved

Surely an annual stepped percentage tax on property ownership based on a standard valuation would bring in a more predictable and less avoidable revenue than stamp duty on the transfer of a property.

i-luv-free-stuff

just a quick question regarding stamp duty.
my house is on the market for offers over £125000 but was looking for nearer the 128000 mark but i believe the stamp duty could be putting people off so would i be able to accept £125000 throught the estate agent and negotiate a cash payment from the buyer of say £2000 then the buyer doesnt pay the stamp duty but i get the price i am looking for (almost).
is this illegal and would the estate agents agree to it?

oldvicar

i-luv-free-stuff wrote: »

just a quick question regarding stamp duty.
my house is on the market for offers over £125000 but was looking for nearer the 128000 mark but i believe the stamp duty could be putting people off so would i be able to accept £125000 throught the estate agent and negotiate a cash payment from the buyer of say £2000 then the buyer doesnt pay the stamp duty but i get the price i am looking for (almost).
is this illegal and would the estate agents agree to it?

Yes, and quite possibly!

oldvicar

Scrap SDLT altogether, and replace it with an annual tax of e.g. 0.2% of the price the property was last bought/sold for. Have it collected locally with council tax.

Due to inflating house prices:
- Frequent movers would pay more overall, just like the present system.
- Those who stay put, such as pensioners perhaps, tend pay less over time.
- Those in expensive properties are 'seen' to pay more (a 'fairer' proportion) in Council tax.

As a slight variation, I would have a lower rate for a principal private residence, and a higher rate for second homes and commercial/buy-to-let properties (with such tax not deductable from income)

i-luv-free-stuff

oldvicar wrote: »

Yes, and quite possibly!

Its illegal but the estate agent would agree with it?

JimmyTheWig

oldvicar wrote: »

Scrap SDLT altogether, and replace it with an annual tax of e.g. 0.2% of the price the property was last bought/sold for.

I like that idea.
It totally gets around the problem of the cash-poor pensioner who has lived in their house for a long time, as the price they paid will be low in today's standards.

No reason again, though, not to have bands in this idea so that those in more expensive houses pay proportionately more.

jamesd

i-luv-free-stuff wrote: »

my house is on the market for offers over £125000 but was looking for nearer the 128000 mark but i believe the stamp duty could be putting people off so would i be able to accept £125000 throught the estate agent and negotiate a cash payment from the buyer of say £2000 then the buyer doesnt pay the stamp duty but i get the price i am looking for

It's a crime and the estate agent would be daft to become a co-consipirator with you and risk prison themselves. The buyer, via their conveyancer, is required to declare the real purchase price. You can expect your solicitor or that of the buyer to make a money laundering report to SOCA if they get even a hint of this happening. They will also, for "professional reasons", decline to continue to represent you.

Eco_Miser

JimmyTheWig wrote: »

I like it.
But it is way too complicated for the "man in the street". People in general wouldn't know how much tax they were paying without resorting to an online calculator.

Or a printed list, or the estate agents advert. There's only one variable once the Chancellor has set the other three.
People in general can't calculate AERs either, doesn't stop them being used.