Consumer Issue: Displaying the full price plus taxes in the property market?

Freeraine

Would it be fair to require Estate Agents to show the price of a house plus stamp duty in the property particulars?
Something like: Purchase price: £300,000 plus £5000 stamp duty
or
Purchase price: £300,000, stamp duty 1.67%

Goods and services are usually advertised with VAT included, or other taxes displayed (sometimes in small print), so the consumer knows where they stand from the beginning of the process of purchase. In property adverts, you won't find any information about how much tax will be added to your bill - you calculate it yourself if you know where to look or your solicitor does the calculation around about the time an offer is being considered.

There is an argument that the house price is 'fluid' and open to negotiation, but so what? All purchases are up for negotiation. When I buy a car, or other goods and services at a discount, the VAT is recalculated, but at least I know the full price starting point.

There is another argument that the Estate Agent doesn't collect the tax, so has no responsibility to forecast it. I don't subscribe to that view. It's a trading standard to advertise prices + taxes and estate agents are traders. It's about giving honest, straightforward information to consumers, surely? Stamp duty has gone through some changes and consumers are in a weak position to find out the true cost of their purchase without calculators such as the one you will find on this site.

Shouldn't consumer organisations be lobbying for this sort of change in the property market place? I think so.

Doozergirl

That'a the first time I've ever seen it mentioned.

There can't be that many people that feel strongly about it.

It would be helpful, I guess, but I'm comfortable using Google.

Guest101

if your buying a house you should be aware of thise stuff.

kinger101

No. It's just not needed. A buyer should be aware they'll need to fork out for stamp duty and a number of other expenses. It would just making rules for the sake of making rules.

csgohan4

Are you also advocating the house price should also include the cost of conveyancing, brokers, house insurance, life insurance, survey costs e.t.c as well?


If you cannot find out how much stamp duty your house will have, you shouldn't be buying a house.

agrinnall

I'd say it could be misleading to show it as the advertised price is most often not the purchase price, so the stamp duty due is in most cases not the figure that would be shown in the advertisement.

mrginge

Freeraine wrote: »

There is another argument that the Estate Agent doesn't collect the tax, so has no responsibility to forecast it.

Well you pretty much hit the nail on the head. SDLT is not a sales tax. Its a transaction tax based on a financial consideration. It is paid by an individual or an organisation directly to hmrc (usually via a solicitor) rather than through the organisation that sells the product.

Many transactions that attract sdlt are not processed by EAs, some may simply be direct between individuals.
Equally, there are reliefs available that mean an 'advertised' amount may be incorrect.

I don't subscribe to that view.

That's because you don't understand it.

casper_g

I think a house purchase is a special case, for a number of reasons.

1) The price is usually renegotiated.

2) The vast majority of buyers take legal advice before committing to buy, so they are hardly likely to miss the fact that SDLT will be payable. When buying property you need to get out of the "I'm just a poor little consumer" mindset and inform yourself or take professional advice.

3) The SDLT is just one of several additional costs the buyer will incur.

4) Property transactions are specifically excluded from a whole range of consumer protection measures, e.g. chunks of the Consumer Rights Act 2015 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

5) The EA isn't collecting the SDLT, as you say, but more than that - the EA isn't even a party in the transaction. Many land sales don't involve an EA at all. The BUYER is responsible for paying the tax directly to HMRC.

6) In terms of funding the transaction, the SDLT can't be seen as just "part of the price" as you won't be able to include it in the amount covered by your mortgage.

Surrey_EA

csgohan4 wrote: »

If you cannot find out how much stamp duty your house will have, you shouldn't be buying a house.

Couldn't agree more.

It's hardly a difficult task to find out what your stamp duty liability is.

davidmcn

casper_g wrote: »

I think a house purchase is a special case, for a number of reasons.

1) The price is usually renegotiated.

2) The vast majority of buyers take legal advice before committing to buy, so they are hardly likely to miss the fact that SDLT will be payable. When buying property you need to get out of the "I'm just a poor little consumer" mindset and inform yourself or take professional advice.

3) The SDLT is just one of several additional costs the buyer will incur.

4) Property transactions are specifically excluded from a whole range of consumer protection measures, e.g. chunks of the Consumer Rights Act 2015 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

5) The EA isn't collecting the SDLT, as you say, but more than that - the EA isn't even a party in the transaction. Many land sales don't involve an EA at all. The BUYER is responsible for paying the tax directly to HMRC.

6) In terms of funding the transaction, the SDLT can't be seen as just "part of the price" as you won't be able to include it in the amount covered by your mortgage.

7) SDLT rates are likely to change in the period between the property being advertised and the relevant date for tax purposes i.e. completion - is the OP suggesting that somebody other than the buyer ought to bear the risk?

8) The SDLT calculation may be dependent on factors specific to the buyer or the transaction e.g. there may be a concessionary rate for first time buyers.

I've never heard of this suggestion before, so I can't see that it's going to have a great deal of support.

buglawton

OP has anticipated the replies. In the end it's a matter of opinion if a Stamp Duty estimate should be on listings. EAs won't like the idea - bad for marketing. Politicians won't - reminds everyone of our stealth taxes. So, ain't gonna happen anytime soon.