Stamp duty holiday ?

eidand

Slithery said:

danlightbulb said:

I think the OP means he is buying his second home, not that he will own two houses. I'd guess he didn't pay stamp duty first time round as an FTB and now will have to.

I do think stamp duty thresholds should be increased as the cut off of £125k is far too low compared to how house prices have risen.

For 2nd home owners, the rate should be lifted massively to discourage it. 20-30% of house value kind of territory. Or the alternative would be to introduce a wealth tax on 2nd homes, something which would also capture current 2nd home owners, which stamp duty changes wouldn't do. A wealth tax on property should be something of the order of 5% of property value per year.

And where will all the tenants live when this causes LL's to sell their properties?

box on the street should be cheap enough, I guess.
Careful what you wish for, stupid changes produce terrible effects.

AdrianC

Slithery said:

And where will all the tenants live when this causes LL's to sell their properties?

They'll all be owner-occupiers, obvs...

Reductio ad absurdum, of course.

The SDLT and income tax changes won't make ALL LLs sell their let properties. Just the ones who were borderline-profitable anyway, if they bothered to admit it to themselves. The "Accidentals", the "Oooh, this'll be a nice investments", the "What do you mean, I can't just move straight back in when I return from travelling?", the basically clueless.

danlightbulb

Slithery said:

danlightbulb said:

I think the OP means he is buying his second home, not that he will own two houses. I'd guess he didn't pay stamp duty first time round as an FTB and now will have to.

I do think stamp duty thresholds should be increased as the cut off of £125k is far too low compared to how house prices have risen.

For 2nd home owners, the rate should be lifted massively to discourage it. 20-30% of house value kind of territory. Or the alternative would be to introduce a wealth tax on 2nd homes, something which would also capture current 2nd home owners, which stamp duty changes wouldn't do. A wealth tax on property should be something of the order of 5% of property value per year.

And where will all the tenants live when this causes LL's to sell their properties?

I think its about asking what should really be incentivised here.

Is it right for people to own 2nd homes by the seaside which are not let, and so empty for most of the year? This practice is destroying seaside communities. In this case, a wealth tax on the 2nd home would be appropriate and would likely release alot of these properties back for sale, which is a good thing.

What about 2nd homes which are let out. I think that's different - they aren't really someone's 2nd home in that case, as its the person who rents it's home.

What should happen with lets is that a direct 2nd home wealth tax shouldn't apply, however we do need controls to ensure the renter is not exploited. For example, is it appropriate for the rent to more than cover the mortgage of a property AND for the owner to also benefit from house price inflation on the property at the same time? Obviously we have capital gains tax, but that only applies when the property is sold and doesn't stop landlords from getting their tenants to cover their full mortgage plus more.

So I think we need something that puts some controls in on this. I.e there should be rules that stipulate that a renter cannot pay more than 60-70% of the equivalent monthly mortgage for the property. This ensures that the landlords are themselves contributing to the cost of the property they will eventually benefit from owning when they liquidate it. It isn't right that landlords benefit from free house price inflation when the renter is paying their full mortgage plus more.

I also think the current tax system for landlords is very unfair. Why should a landlord be able to offset their mortgage interest, new windows or other property repairs, buildings insurance etc costs against their tax bill when other homeowners cannot?

blue_max_3

I think some reform would be good. London and the SE prices are considerably more expensive, so the tax is a huge burden on even the smallest properties. But how to devise a fair system is a challenge. Suddenly abandoning a tax and then reinstating it later would be very cruel to those who slipped out of that window.
There is talk of shopping vouchers coming soon, so that might be more likely. 

LIMPIT61

If as now widely reported there is going to be an announcement by the Chancellor within his scheduled statement on Wednesday 8th July for a potential reduction in the threshold of STD, surely it would be madness/foolhardy making an announcement more than three months in advance of the reported date of the Autumn Budget (When again its reported the changes would be effective from), thus effectively freezing any planned completions within the housing market until end of October, early November ?  I am close to exchange/completion, but I suspect my Buyer will look to suspend the purchase should the reported changes be announced ?
  Thoughts please    

Bibbitybobbitybop

Very concerned our buyer will pull out / stall until the autumn. We're talking £13k stamp duty 😭

davidmcn

LIMPIT61 said:

If as now widely reported there is going to be an announcement by the Chancellor within his scheduled statement on Wednesday 8th July for a potential reduction in the threshold of STD

I think you mean SDLT. Pretty sure the Department of Health still has responsibility for STDs...

SpiderLegs

Holding off until autumn makes absolutely no sense. It will either come in immediately or won’t be announced at all.
It sounds like the usual ‘float-an-idea-we-haven’t-really-thought-about in the media’ plan that is rife with politicians these days. Of course if they don’t announce it then some people will still hold off in the hope that they do. 

Really though who knows what these idiots will dream up next.

dexterwolf

We are 2 weeks into a house purchase and for us it would save 8K and our sellers about 10.5K . So like others surely this would delay things where people just sit on it until Exchange . So surely if the government are doing this then it needs to come in within a few weeks really . The housing market is already very up and down and if this comes in and nothing moves for a few months it won't help it at all. I know its different but the Furlough scheme was put in place very quickly otherwise mass unemployment  so surely a decision like this needs a quick deadline not one months ahead. Otherwise don't do it at all.

jaxkesa

I'm in the middle of a purchase too and any deferred implementation of a SDLT holiday would be a nightmare.

It's OK for those who are happy to wait 4 months but those in the chain who can't will have big problems. Many mortgage offers will expire for starters.