Time to change Stamp Duty Levels?

cells

AndyGuil wrote: »

Get rid of it. It is a silly tax that just stops people moving house.

Every tax stops people on the margin doing whatever the tax is put on

Eg
Income taxes discourages some from working
VAT discourages spending

Stanp duty has two huge pros. Easy to collect and very progressive. Kensington supposedly pays more than the whole of Scotland.

N1AK

cells wrote: »

Stanp duty has two huge pros. Easy to collect and very progressive. Kensington supposedly pays more than the whole of Scotland.

Both of those pros are subjective:
1/ Stamp duty can be avoided or minimised at the top end by structuring the deal correctly. At the simplest end that means not selling but agreeing discounted rents, at the more advanced end it includes transferring ownership to a foreign business entity with multiple owners.
2/ Lots of taxes are progressive, so really it just doesn't have the 'con' of being regressive or neutral.

It won't change because any tax or spending change needed would be even more damaging politically, but it 'should' be changed to a property tax rather than a moving tax.

wotsthat

Graham_Devon wrote: »

No.

What's more, I'm not sure why you are railroading me down this route. Seems a bit pointless if I'm honest.

All I said was that in my opinion that any revenue from stamp duty, if stamp duty is taxed, should be made up elsewhere.

It's not railroading. You made a big deal about your colleague taking a circuitous route to work because of the poor state of the road. You've used this as an example to demonstrate why any reduction in tax would be a bad thing. It's an example instead of why the roads are in that state - thousands of people have probably muttered stuff about the country going to the dogs and 1 or 2 actually complained.

I drop the occasional line to my council to let them know what I think about their spending on pet projects and charitable donations. I'm glad no-one else can be bothered - it gives me more influence.

cells

N1AK wrote: »

Both of those pros are subjective:
1/ Stamp duty can be avoided or minimised at the top end by structuring the deal correctly. At the simplest end that means not selling but agreeing discounted rents, at the more advanced end it includes transferring ownership to a foreign business entity with multiple owners.
2/ Lots of taxes are progressive, so really it just doesn't have the 'con' of being regressive or neutral.

It won't change because any tax or spending change needed would be even more damaging politically, but it 'should' be changed to a property tax rather than a moving tax.

Well considering Kensington with about 1/20th the housing stock as Scotland is paying more in stamp tax then it seems not many are avoiding it.

it is very progressive. The average house in Kensington pays £50k while the average in Scotland is probably closer to £1k or 50x difference. Income tax differential will be far less. With say the average Scottish paying perhaps £4k and the average Kensington worler paying perhaps £30k or some 8x difference

AndyGuil

cells wrote: »

Every tax stops people on the margin doing whatever the tax is put on

Eg
Income taxes discourages some from working
VAT discourages spending

Stanp duty has two huge pros. Easy to collect and very progressive. Kensington supposedly pays more than the whole of Scotland.

Up to a point, it is avoided quite frequently as many taxes are. Discouraging spending on luxury items is one thing and income tax is a necessity. Stamp duty effects peoples mobility and it comes straight out of their deposit so it makes purchasing a house difficult. You are basically saving money that you have already paid income tax on to then get it taxed again because you want to buy a house. The housing market needs to be a bit more liquid and removing this tax will help this greatly. It will make it easier for houses to change hands and greater liquidity reduces risk and helps stop rapid movements in prices in either direction.

CLAPTON

in general, taxing house purchases (stamp duty) will reduce the price of houses just as subsidising house purchases increases the price.

cells

AndyGuil wrote: »

Up to a point, it is avoided quite frequently as many taxes are. Discouraging spending on luxury items is one thing and income tax is a necessity. Stamp duty effects peoples mobility and it comes straight out of their deposit so it makes purchasing a house difficult. You are basically saving money that you have already paid income tax on to then get it taxed again because you want to buy a house. The housing market needs to be a bit more liquid and removing this tax will help this greatly. It will make it easier for houses to change hands and greater liquidity reduces risk and helps stop rapid movements in prices in either direction.

I don't think it will do much to 'help people move'

About a million homes are sold a year there is already a lot of movement

Plus as someone already noted reduce a stanp duty of say £10k and you will likely find that house prices go up more than x as people use their former stamp duty payments to bid up prices and leverage that £10k stap duty saving via a 25% mortgage into £40K worth of extra bidding room

of course that would not be the case if thrre was ample supply in the uk eg 500k units a year but there isn't. We are in a shortgage so abolish stamp duty will just more than add it to prices

wotsthat

N1AK wrote: »

It won't change because any tax or spending change needed would be even more damaging politically, but it 'should' be changed to a property tax rather than a moving tax.

If politicians used the same cunning in cutting spending as they do raising taxes we might not need either. I don't see why it's a choice between a moving tax and a 'staying' tax.

Already a direct line has been drawn between spending cuts and some youth club in Devon - now I'm meant to worry about the popularity ratings of politicians if they can no longer spend money they don't have.

N1AK

wotsthat wrote: »

If politicians used the same cunning in cutting spending as they do raising taxes we might not need either. I don't see why it's a choice between a moving tax and a 'staying' tax.
/QUOTE]

Because the view that we should cut taxes and magically by just eliminating waste our spending will fall isn't worth bits it takes up on a computer. If it's true then it has been true for years, we're the same electorate and have the same politicians as then and it hasn't changed.

There may well be huge amounts of waste there but only someone completely lacking in common sense could think that we can just click our fingers and eliminate it. If we could, then why didn't we last year or the year before.

You might as well say we should remove all taxes and make government a charitable affair because the huge growth this would cause would lead to more government revenue. They're both about as realistic.

cells

N1AK wrote: »

wotsthat wrote: »

If politicians used the same cunning in cutting spending as they do raising taxes we might not need either. I don't see why it's a choice between a moving tax and a 'staying' tax.
/QUOTE]

Because the view that we should cut taxes and magically by just eliminating waste our spending will fall isn't worth bits it takes up on a computer. If it's true then it has been true for years, we're the same electorate and have the same politicians as then and it hasn't changed.

There may well be huge amounts of waste there but only someone completely lacking in common sense could think that we can just click our fingers and eliminate it. If we could, then why didn't we last year or the year before.

You might as well say we should remove all taxes and make government a charitable affair because the huge growth this would cause would lead to more government revenue. They're both about as realistic.

Government operate between about 35-55% of GDP with a few outliers for special reasons.

when thatcher got into power the state was about 47% of GDP and she left it at about 37%. Tony B and his pal Gordon B took it back upto 47%.

The right wing seems to aim for 40% while the left for 45% of GDP.

That is a difference of about £80B in taxes

Or in reality a realistic less waste lower spending government can cut overall taxes about 10% and a spendaholic government can up spending about 10% max. Beyond that is difficult for either to do.