Stamp Duty Changes

the_flying_pig

Generali wrote: »

Economic theory says that the benefits will be split between buyers and sellers FWIW. Prices will rise a bit but by less than the tax cut.

yeah, dunno, i mean, that's right in general for taxes on buying but i suppose this stamp duty cut doesn't just reduce the effective price a very small %, it also reduces the up front cash requirement [i.e. deposit+fees+taxes] by an actually non-trivial amount. if it the deposit requirement that was mostly binding then it's possible that the impact on demand could be a lot more than implied by say a £5k saving on a £260k house.

purch

Generali wrote: »

Economic theory says that the benefits will be split between buyers and sellers FWIW. Prices will rise a bit but by less than the tax cut.

Well that's you out of the running for the Editorship of the Express.

chewmylegoff

Graham_Devon wrote: »

Yes, I do realise that.

But the point at which these changes help you is when you are a homebuyer, not a homeowner.

The BBC has even gone as far as suggesting up to 22m homeowners could be better off as a result of this change.

If you want to get into semantics, the tax is payable at the same time that the property is transferred into your name and are hence a homeowner (and certainly by the time your solicitor transfers the cash to the revenue you are a homeowner) but in any case it also helps anyone trying to sell their house (and that person will likely be buying another one) as the buyer has to raise less money to buy the house and it prevents prices stalling at the incremental points. If you own a house which is "worth" 250-275k it helps you very much, for instance.

TickersPlaysPop

The new SD system is a system that will lead to more house price inflation compared to the slab system. Is this a responsible thing to do considering the state of the housing market?

Has the current government done anything to stop high house price inflation? It seems every action and policy is leading to a higher likelihood for more and quicker inflation?

ukcarper

TickersPlaysPop wrote: »

The new SD system is a system that will lead to more house price inflation compared to the slab system. Is this a responsible thing to do considering the state of the housing market?

Has the current government done anything to stop high house price inflation? It seems every action and policy is leading to a higher likelihood for more and quicker inflation?

Yes because it could help increase transaction and whether it will lead to more house price inflation is debatable.

Ageing_Disgracefully

ukcarper wrote: »

Yes because it could help increase transaction and whether it will lead to more house price inflation is debatable.

The former Stamp Duty cliff edges helped to keep prices down. Very few properties would sell for £255K or £510 so this limited prices of properties which weren't quite as good as those priced bang on the thresholds.


I would imagine that this change is likely to bring about a rise of 2% to 3% in property prices all down the line from £500K.

ukcarper

Ageing_Disgracefully wrote: »

The former Stamp Duty cliff edges helped to keep prices down. Very few properties would sell for £255K or £510 so this limited prices of properties which weren't quite as good as those priced bang on the thresholds.


I would imagine that this change is likely to bring about a rise of 2% to 3% in property prices all down the line from £500K.

I'm not sure that's right it will increase the prices of some properties around the thresholds but further above thresholds the price already reflects the value.

Generali

the_flying_pig wrote: »

yeah, dunno, i mean, that's right in general for taxes on buying but i suppose this stamp duty cut doesn't just reduce the effective price a very small %, it also reduces the up front cash requirement [i.e. deposit+fees+taxes] by an actually non-trivial amount. if it the deposit requirement that was mostly binding then it's possible that the impact on demand could be a lot more than implied by say a £5k saving on a £260k house.

I take your point but actually most of the changes are trivial. £5,000 on a £260,000 is non-trivial but is also not a typical FTB house (the sort where SDLT is most important) and also at one of the price points that will see the largest savings.

This is a good change to a bad tax but lets not turn it into something it's not.

Generali

TickersPlaysPop wrote: »

The new SD system is a system that will lead to more house price inflation compared to the slab system. Is this a responsible thing to do considering the state of the housing market?

Has the current government done anything to stop high house price inflation? It seems every action and policy is leading to a higher likelihood for more and quicker inflation?

Interesting use of the word "will". Is that a new definition of will, will=might in my opinion?

Ageing_Disgracefully

Generali wrote: »

This is a good change to a bad tax

Or a bad change to a very good tax (one of the most cost effective and efficient to collect, and very straightforward to understand).


In my opinion the chancellor should have left well alone other than to increase the rates on the most expensive properties.