Government ePetition - change the way stamp duty works

scottishblondie

https://submissions.epetitions.direct.gov.uk/petitions/28021

Hello all!

I came across this ePetition yesterday (I didn't start it) after reading a thread which touched on the subject briefly. I'm of the opinion that the way stamp duty works just now with the sudden jump when you go over a threshold is not fair, and skews the housing market somewhat.

If it were a progressive system, it would be much more affordable to buy and easier sell houses worth just over the threshold. So if you were to buy a house for £260k, you would pay 1% on £250k and 3% on £10k, rather than 3% on the full amount.

Unfortunately, it needs a 100,000 signatures to be considered for debate in the House of Commons! So if you share this opinion, please consider signing the petition.

giraffe69

You don't pay 3% on £250k. You pay it on more than that i.e. 250K and 1p. Poor of whoever set it up to make such an error although I agree with the basic concept.

agrinnall

I've signed it but it's got a hell of a long way to go to reach 100,000 signatures.

mrginge

they should increase the 250k threshold to 5% imo

giraffe69

they should increase the 250k threashold to 5% imo

Do you want to say why and also whether you would be increasing the higher rates? If you buy a family size house outside London it is pretty easy to have a charge exceeding £10k in stamp duty. That doesn't encourage such things as social and economic mobility.

mrginge

Yes i would be increasing the higher rates too. I'd use the extra revenue to scrap the 1% band or increase the threshold

lb364

I'll be signing
I agree it was rather careless about the 250k oversight but then when I saw the banks mortgage advisor he thought it was 3% for 250k as well :doh:

giraffe69

Yes i would be increasing the higher rates too. I'd use the extra revenue to scrap the 1% band or increase the threshold

It's not a very good tactic to have 0% up to £250k and 5% immediately above as it would distort the market even more. In the fullness of time when tax cuts are more on the agenda than now I think that

a. there should be a higher zero rate amount, say £175k not 125k.
b. Other rates should be adjusted i.e. next band starts at £300k
c. It is graded so that you pay only for the excess i.e for £176k you pay on £1k only
This would have the merit of removing the distortions from the market. If that can't all be afforded then either don't increase the zero band or raise the higher levels %.

Waterlily24

giraffe69 wrote: »

You don't pay 3% on £250k. You pay it on more than that i.e. 250K and 1p. Poor of whoever set it up to make such an error although I agree with the basic concept.[/QUOTE

Have to say that HMRC website is a bit misleading it says

£125,000 - £250,000 1%
£250,000 - Can't remember is it £500,000 lol 3%

You would think they would get it right wouldn't you? lol

agrinnall

Waterlily24 wrote: »

Have to say that HMRC website is a bit misleading it says

£125,000 - £250,000 1%
£250,000 - Can't remember is it £500,000 lol 3%

You would think they would get it right wouldn't you? lol

I don't know why you think the HMRC website isn't correct. This is what it says:

Up to £125,000 Zero
Over £125,000 to £250,000 1%
Over £250,000 to £500,000 3%
Over £500,000 to £1 million 4%

Over £1 million to £2 million 5%

Over £2 million from 22 March 2012 7%
Over £2 million (purchased by certain persons including corporate bodies) from 21 March 2012 15%

I think that's perfectly clear.

http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm

mrginge

giraffe69 wrote: »

It's not a very good tactic to have 0% up to £250k and 5% immediately above as it would distort the market even more. In the fullness of time when tax cuts are more on the agenda than now I think that

a. there should be a higher zero rate amount, say £175k not 125k.
b. Other rates should be adjusted i.e. next band starts at £300k
c. It is graded so that you pay only for the excess i.e for £176k you pay on £1k only
This would have the merit of removing the distortions from the market. If that can't all be afforded then either don't increase the zero band or raise the higher levels %.

I think it's an ace tactic personally. Depends what you actually want to achieve through taxation I suppose.
TBH the first two of your options actually help to distort the market.