£53k Increase in Stamp Duty For Me

Mortgage_Mark_2

LandyAndy wrote: »

This is not the plaice for levity.

It's dolphinately no joking matter that it's costing the OP a fair amount more money to buy his bream home.

OP - if you want any advice, let minnow.

happylucky

tonyinessex wrote: »

Another thing here is the psychological aspect of getting 'value'. Fair enough if house prices increase, buyers feel like they are 'getting more for their money' in that the house is now worth that extra £x0k and that will be realised if they ever go onto sell.

This extra £53k tax is, as far as a buyer is concerned, going nowhere (please don't debate socioeconomics suicidebob), we're not getting anything for it. The previous £100k tax had been dealt with in our heads and we've come to terms with it being a cost. To add £53k to that for nothing in return I think could reduce houses in this bracket by more than £53k, if that is possible.

I am a first time buyer too, so I was shocked to find out I'd have to pay £100k tax in the first place a few months ago. It now seems more attractive to me to buy a much smaller house and to do it up..

You're in London, right?

If I were your landlord/vendor and you came to me about this stamp duty increase, I would be thinking as a business person from a very pragmatic standpoint. The notion of you "gazundering" would not even cross my mind. You are not debating the asset value in any shape or form. You have simply been subjected to a significantly increased, unavoidable cost of this transaction which was not considered from either of our sides when striking a business deal.


Given the astronomical value increases in London over the past couple of years, and the potential stagnation/drops if not selling quickly and crystallizing gains, I would have been most happy to split the extra transaction cost with you 50/50% for the sake of a quick sale. Seriously.


Not sure if that point of view helps or not.

But I just sold up in London (couple of months ago) expecting a market correction to happen before I reinvest next year, so I'm horribly biased...

pinkteapot

Can we not be so quick to pick on the wealthy around here? The top 1% of earners pay around a third of all the income tax paid in this country. Public services would be considerably worse off without them.

And no, I'm not in the 1%.

Doesn't matter how much money you have - you're always entitled to ask for help with how to save it on MSE! :money:

wiseguy80

I'm at a loss to understand why someone buying a £2m house will be reading the "money saving" expert forum.

For the shock of 53% increase in value, I empathise with you. However, I can see why the chancellor announce it to come in force from the next day. Otherwise there would have been a frenzy.

For the fairness argument, can I ask if you are non-DOM i.e. if you are resident permanently in UK and you wanted to live here for a long run.

pinkteapot

wiseguy80 wrote: »

I'm at a loss to understand why someone buying a £2m house will be reading the "money saving" expert forum.

Wealthy people are often fairly careful with money. Tends to be how they get wealthy in the first place...

I started out on these forums in a rented flat, with no savings, and £5k of credit card debt when I was earning just over £20k. I came here to get out of debt.

Many years later (I'm on my second username), I'm now married with substantial equity in a £500k house, good savings and no debt apart from the mortgage. (No, my hubby isn't rich before you all think it ). At what point should I leave the forums?

MSE is about using your money as efficiently as possible - saving money on things you want to buy, boosting your savings and investment returns, etc. That's something everyone wants to do.

wiseguy80

Hi pinkteapot,
yeah, you are right. Rich people are more careful with their money.

I always thought millionaires think more in terms of investment than saving but yeah £53K is a lot of money for anyone to be just handing over to government.

Ageing_Disgracefully

tonyinessex wrote: »

:mad:
So, 2 weeks before I was due to buy the house I am renting (for £1.99m) I am hit with the the bombshell that the Stamp Duty I have to pay has gone from £100,000 to £153,000.

I think a renegotiation is in order.

I agree that a renegotiation is in order.


If the seller is going to be purchasing another similarly priced property then they are going to be £53K out of pocket, so I would expect them to up the price of your purchase by that amount.

pinkteapot

wiseguy80 wrote: »

I always thought millionaires think more in terms of investment than saving but yeah £53K is a lot of money for anyone to be just handing over to government.

To be fair, OP might not be a millionaire. He might be a guy with a £2m house and a £1.8m mortgage.

Mortgage_Mark_2

pinkteapot wrote: »

To be fair, OP might not be a millionaire. He might be a guy with a £2m house and a £1.8m mortgage.

Unlikely - can't think of any lenders who would offer a 90% mortgage at that level

tonyinessex

moneyistooshorttomention wrote: »

Then in that case (ie being a professional gambler) that means you know that everything in life is a gamble basically. You win some. You lose some.

Personally, I would have said that with all this talk that has been going on for some time re Mansion Tax that it was a pretty certain bet that this would happen at some point and the only question was exactly when (rather than whether) this would happen.

Going back to when I sold my starter house and bought my current one last year and my guess was that the stamp duty payable on my present house would go down at some point (being a cheaper level house), but my estimate was that I would lose this house if I hung around and waited to buy it until that happened. I was correct = stamp duty on my house HAS gone down, but I would have lost the house whilst waiting for it to do so. That was a gamble and I backed the "best horse in the race" and have duly winced that I lost that stamp duty I could have saved if the house had only "hung on and waited for me", but whatcanyado?

Other gambles were other people had their eye on my current house and it would appear they gambled and waited for it to be on the market so long that the price would be slashed. They lost...because, whilst they waited/hoped and downright gambled on it..I came along and bought the house.

The buyer of my last house gambled that they could wait a while before coming along to look at it in the first place and hope I'd do a drastic price slash and then they planned to come and have a look. I found a way to "flush them out of the woodwork" and they lost their gamble and had to buy the house without a drastic price slash:).

It's all a gamble and you, more than anyone, should know that fact and that housebuying is (more than many things) a gamble. This gamble you lost...and the question is as to why you didn't put in a bid for this house sooner (as it was pretty obvious that this stamp duty change was going to happen at some point fairly soon).

You bring up some valid points and you are correct, life is a gamble. (that's why I don't have any type of insurance is it's -EV)

But with every gamble you want to make the best decision based on your odds. Sometimes you hit 16 vs 10, sometimes you don't. It's based on other parameters.

In effect, I've put my money on the table, but that isn't binding until the hand has been dealt.
I am going to have to renegotiate the price anyway, as the owner failed to tell me about a very important structural feature of the house that didn't pass building regs (he built it 7 years ago but only 99% finished it) that is going to take a fair bit of money to fix.