Stamp Duty Changes

BobQ

Stamp Duty
• 74% of people think that the changes to stamp duty are a good idea, 7% a bad idea.
• 58% of people think it would be a bad thing if it led to increased house prices.
• But most don't expect this to be the result - 23% think that the stamp duty changes will make prices increase faster, 12% that it will slow increases, 42% that it will make no difference to house prices.
YouGov / The Sun. December 2014. Full tables.)

https://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/ri1n5coj0q/SunResults_141204_stamp_duty_Website.pdf,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Running_Horse

chewmylegoff wrote: »

If you own a house which is "worth" 250-275k it helps you very much, for instance.

As those prices rise, people owning houses in the 225-250k bracket will probably chance their arm on higher asking prices to fill the gap.

Pre-election boom by any chance?

On the whole it will be good to remove artificial distortions, but in the short term this can only be bad for affordability. Especially if it filters down to even lower price ranges.

TickersPlaysPop

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.

Plain stupid? I thought that until it changed because nobody I spoke to said anything otherwise.

The now old slab system with those seemingly stupid step changes were most likely designed to slow house price inflation.

If this is the case, do we will agree that this is the best timing to make this system change in the interests of maintain house inflation at a sustainable rate?

This is a great windfall for some, good for people that believe that more rapid house inflation is a good thing, maybe good for the chancellor because there will be overall more transactions and more revenue on the new system. So this was probably to help offset all those large pledges to spend spend spend, on NHS, roads, flood defenses etc....

Bad timing in my opinion when houses are already running away from people in terms of affordability. This new system should have been brought together with another change to off set the negative, I.e. Something to help suppress house price inflation... I.e. Reduce demand on residential property by non UK resident people and investors. These people can buy if they are already living here to show commitment to this country. Exposing our very limited housing stock on the global commodity market is a recipe for more and more inflation.

Generali

Jason74 wrote: »

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.

To get straight to the point: thank you!

Jason74 wrote: »

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.

That's about it. There will likely be some small changes around the current stamp duty rate limits but apart from that basically nothing or, more likely, actually nothing.

The thought that this stupid system of banding the tax was designed to prevent house price rises by Mr Brown is frankly risible given his record on the house market which was to refuse to confront NIMBYism which let prices go crazy.

Say what you like about the current Government but at least they are doing something about the single biggest economic challenge the UK faces, a dysfunctional housing market.

TickersPlaysPop

LydiaJ wrote: »

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.

Many people thanked your post.... but do you all realise that it is an incorrect explanation of the slab system?

The old slab system was not the same as the income tax brackets, which is why it had the weird 'slab' name.

With The old slab system..... When the house goes above the threshold the whole of the house value is taxed at the higher percentage, not just the portion above the threshold.

Generali

I

TickersPlaysPop wrote: »

Many people thanked your post.... but do you all realise that it is an incorrect explanation of the slab system?

The old slab system was not the same as the income tax brackets, which is why it had the weird 'slab' name.

With The old slab system..... When the house goes above the threshold the whole of the house value is taxed at the higher percentage, not just the portion above the threshold.

I think LydiaJ gets it, you just don't see that she gets it.

ukcarper

TickersPlaysPop wrote: »

Plain stupid? I thought that until it changed because nobody I spoke to said anything otherwise.

The now old slab system with those seemingly stupid step changes were most likely designed to slow house price inflation.

If this is the case, do we will agree that this is the best timing to make this system change in the interests of maintain house inflation at a sustainable rate?

This is a great windfall for some, good for people that believe that more rapid house inflation is a good thing, maybe good for the chancellor because there will be overall more transactions and more revenue on the new system. So this was probably to help offset all those large pledges to spend spend spend, on NHS, roads, flood defenses etc....

Bad timing in my opinion when houses are already running away from people in terms of affordability. This new system should have been brought together with another change to off set the negative, I.e. Something to help suppress house price inflation... I.e. Reduce demand on residential property by non UK resident people and investors. These people can buy if they are already living here to show commitment to this country. Exposing our very limited housing stock on the global commodity market is a recipe for more and more inflation.

I think prices under say the £250k limit might increase slightly but I personally would rather pay a little more for the house and less stamp duty so long as the overall cost was lower and I don't it will make any difference away from the thresholds.

As for foreigners owning houses if they are la BTL it doesn't matter what nationality the owner is and your perceived problem is mainly centred on London where many of the properties would not be built if it wasn't for overseas buyers.

TickersPlaysPop

As many on here say, it's Al about supply and demand.

So build more houses

And manage demand.... how to reduce demand?

Take our homes off the global commodity market.

LydiaJ

Generali wrote: »

I

I think LydiaJ gets it, you just don't see that she gets it.

Thank you Generali.

Tickers, I was addressing Aging Disgracefully's assertion that an advantage of the slab system was that it was easy to understand, and I meant that people will have no trouble understanding the new system because it is similar to something they already know about in the context of income tax, even though stamp duty has not been done that way up until now.

Generali

TickersPlaysPop wrote: »

As many on here say, it's Al about supply and demand.

So build more houses

Yes, 100% correct.

TickersPlaysPop wrote: »

And manage demand.... how to reduce demand?

Take our homes off the global commodity market.

Aarrrgh. No, don't get into that socialist rubbish. Just let demand be supplied. And you were doing so well. **sigh**