Stamp Duty Changes

LydiaJ

Ageing_Disgracefully wrote: »

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.

But there aren't any changes to the arrangements for collection, are there? So it should still be just as efficient as it's always been.

As for being straightforward to understand, I don't see where the problem is. Paying tax on the bit above a threshold is something that everybody knows about because of income tax. Most people are numerate enough to work out "nothing on the first £125000 and 2% on the bit above that". If they can't manage that, they've probably got enough nous to find an online calculator and bung their numbers in to see what comes out, or at a pinch ask the estate agent or solicitor to calculate it for them. The truly innumerate can't do percentages anyway, so would have needed help even under the old system.

I agree with Generali. Stamp duty was structured in a stupid way. Now it's going to be structured in a more reasonable way. This is a good thing.

getmore4less

If people want to find out the impact of the changes they can use the land reg data

A plot of sold prices will show that the curve is not as you would expext for a data set the size it is

I am sure there are the plots somewhere, but is someone wants to here is the data for all houses 2014

http://publicdata.landregistry.gov.uk/market-trend-data/price-paid-data/a/pp-2014.txt

The post change data will start filtering through and I expect to see the curve smooth out.

getmore4less

FOund example on this page that shows the effect


http://blog.zoopla.co.uk/2014/03/14/the-stamp-duty-effect/

getmore4less

Based on the above graph the effect is over the next 20k ish above each threshold

has some impact £5k ish on the houses near the £125k mark, less on the £250k at 500 not enough volume to get an estimate

Jason74

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.

Which of course explains your logic as to why you think the impact will be between tiny and nil. I was recently considering buying a house for around £400k. The stamp duty under the old system would be £12k, under the new system £10k. In terms both of what 'd be willing to pay for the house, or what a rational seller would expect me t pay for it, the change is neither here nor there in the greater scheme.

Of course, if I was thinking of buying at 250K, the change might persuade me to push my budget for the right house to £260k, as there is no longer the stamp duty "slab" to consider. But that's a relatively small section of the market, and it's unlikely to have much of a knock on effect higher up the chain. It just means that the "dead zone" in the £250-£270k bracket will no longer exist.

I suppose that what I'm saying in a very long winded way is that I agree with your analysis, as I usually do on purely economic matters.

Zero_Sum

Ageing_Disgracefully wrote: »

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.

very good tax?

£250,000 house pay £2,500
£250,001 house pay £7,500

That's just plain stupid.

I do think the point at which it's more expensive (£937k) is way too high. Should have been nearer to half that, if for no other reason to put a downward pressure on London prices.

CLAPTON

Zero_Sum wrote: »

very good tax?

£250,000 house pay £2,500
£250,001 house pay £7,500

That's just plain stupid.

I do think the point at which it's more expensive (£937k) is way too high. Should have been nearer to half that, if for no other reason to put a downward pressure on London prices.

if the buyer still pays the same amount of money i.e. house price plus tax, who benefits from lower London house prices?
why dos it matter?

craftyeric

I think it's an improvement, particularly for people whose houses are really around the £260-270k mark but who have had to settle for a maximum of £250k in the past.

ging84

a rebate going back 12 months would be total madness, why 12 months, why not 6 or 24....

It might seem a bit gutting for anyone who bought a house in the last few weeks or months, but if the alternative was to announce it now, and bring it in at the end of the financial year, they'd kill the housing market for 6 months, so really it's not a disadvantage to those who've just bought but a windfall for those due to complete.

The real big winners hear could be house builders, they very often pay the stamp duty or a large chunk of it on new homes, particularly those just over the big jumps in rates, depending on there sale contracts they could be about to either save themselves hundreds of thousands on their end of year completions, or the buyers could be enjoying a very nice Christmas bonus.

michaels

My buyers were apparently in a very good mood, a 3.5k before xmas good mood.....