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Sellers to pay stamp duty?


Wight Flight

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Wight Flight

Being widely leaked that the onus for paying stamp duty will move to the sellers.

Is this good or bad?

Will they just put the price up to cover the duty?

The interesting thing is that, under this scheme, whatever you buy instantly has less equity as you have to factor in the stamp duty liability on selling.

I assume, therefore, that the banks will increase their deposit requirement to acknowledge this.

Bit of a pisser for landlords though - hit on the way in, hit on the way out.

Thoughts?

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There'll be an uproar about double payments -- They'll have to have an exemption re. 'if you paid on the way in'.

Other than the potential double-spend problem, it is a good idea.  

[ie, it is usually easier to tax people when they've got the money, rather than when they've got none]

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My initial thoughts were it’ll push up selling prices, but first time buyers (who are those struggling to get a deposit together) are already exempt from paying stamp duty on the first £300k which will cover most housing in the U.K. I don’t think it’ll have that much of an impact.

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We are in the process of buying and due to exchange end of September. Are these changes usually implemented immediately or will there be a cooling off period? I think I might delay until end October and save 10k!

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Wight Flight
24 minutes ago, Gloommonger said:

We are in the process of buying and due to exchange end of September. Are these changes usually implemented immediately or will there be a cooling off period? I think I might delay until end October and save 10k!

I think stamp duty changes normally happen immediately.

I would suggest all estate agents take the next two months off. The market will surely go absolutely flat until this is clarified.

 

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1 hour ago, Wight Flight said:

I think stamp duty changes normally happen immediately.

I would suggest all estate agents take the next two months off. The market will surely go absolutely flat until this is clarified.

 

It is flat/dead.

Still everything helps.

 

2 hours ago, Castlevania said:

My initial thoughts were it’ll push up selling prices, but first time buyers (who are those struggling to get a deposit together) are already exempt from paying stamp duty on the first £300k which will cover most housing in the U.K. I don’t think it’ll have that much of an impact.

It might, if prices were rising.

They are not.

This is downward pressure on prices.

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Wight Flight
22 minutes ago, spygirl said:

This is downward pressure on prices.

Is it?

If it is true that the deposit is the issue, this could be a leverage problem.

Say you want to buy a £400k home. You need a £40k deposit and £10k stamp duty.

Get rid of the stamp duty and you now have a £50k deposit. Meaning, MMR aside, you can now afford a £500k home.

 

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Wight Flight
7 minutes ago, Tdog said:

Or buyer puts up the price to cover the cost of their tax bill.

Another crap idea of the Tory party doing what they can to reinflate the bubble a little more.

Surely this will be a buytoletters dream for such a policy to come in, being they intend keeping the property as a pension in many cases.

 

I don't know - perhaps it will be more expensive in stamp duty to sell to a buytoileter.

The only thing I do know is that there isn't a snowballs chance of my current landlord getting a buyer in the next couple of months. Which is good.

And it will cost my ex-landlord a fortune. Which is funny.

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1 hour ago, Errol said:

Selling prices will just rise to take the duty into account. No other result of this change.

Not at the level oftransaction Im seeing.

 

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3 hours ago, Gloommonger said:

We are in the process of buying and due to exchange end of September. Are these changes usually implemented immediately or will there be a cooling off period? I think I might delay until end October and save 10k!

The 3% second home surcharge was announced in the Autumn Statement 2015 but didn’t come in until April 2016. That’s not to say there would be a delay this time, I don’t know.

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Wight Flight
54 minutes ago, Tdog said:

Any budget has to be voted through parliament, its dubious if they have the numbers for that depending what else is in it. Could be a case of a budget after an election.

It is almost unprecedented for parliament not to approve a budget.

But we live in interesting times.

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Why not abolish it on everything below 250k. Double it on everything above and and 10% tax on landlord BTL purchases and non British residents. Nothing wrong with the old system based on bands which had a limiting factor on prices. Which is a good thing. 

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UnconventionalWisdom
10 hours ago, Tdog said:

Besides want SDLT removed for first time buyers up to circa 300k recently.

Any changes will be for the benefit of the super rich and landlords.

I hope you are wrong. The Tories know they will get battered by supporting landlords. It doesn't bring them to power anymore. Typical people who should vote Tories aren't doing so because they are forced to rent and have no wealth. Their parents are also annoyed at adult kids moving back home- people have realised HPI is bad. They will know this by looking at the voting history. They paint Corbyn as being dangerous, reality is that Corbyn is just the result of high wealth inequality. People in good jobs cant get houses, no way they are voting for the status quo. 

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UnconventionalWisdom
1 hour ago, Tdog said:

Boris's personality

He will get a honeymoon boost which is why they prob want a quick election. I'm sure that s24 was them realising they need a new generation of proud Tories. How long he can last though with people getting increasingly screwed over by landlords remains to be seen. 

Tories gave only had a majority government for 2 years of the past 22 years. They dont have the support many believe. Reading db's fantastic thread and a Ray Dalio, if you believe in cycles, this is just ststens adjusting. The wealth equality is just swinging back. If they support landlords and land owners, they will just increase the political will for change/desire for revolt in 5 years time. 

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How about scrapping stamp duty and replacing it with VAT? The vendor gets a 1% VAT deduction for every full year that they've lived there.

It will help VAT registered builders and discourage wannabe house flippers. 

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19 minutes ago, jm51 said:

How about scrapping stamp duty and replacing it with VAT? The vendor gets a 1% VAT deduction for every full year that they've lived there.

It will help VAT registered builders and discourage wannabe house flippers. 

VAT is complicated.  Eg, your idea would encourage VAT registration of BTL who'll then have a 20% advantage over normal buyers.

SDLT is actually a sales tax for houses, so actually what you're suggesting, with a proviso that most people get the 'reduction', albeit by a different calculation (ie most don't pay (or don't pay much) for a simple OO transaction).

I'd suggest that they should remove CGT from primary residence -- that would take the heat out of rises and not hurt house transactions during crashes.  While they were at it they could also sort out CGT -- by giving everyone a £5k allowance that can be held for 10-20 years (removes the CGT bung for the wealthy, allows the long term holder to not see the CGT but hurts flippers).

They should also have a default 'business rate' for all houses, with a rebate for OO and an allowance for individuals who put it through their tax return.  That would resolve most of the current problems with UK property being used to park overseas money, and the 'under the counter' BTL.

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On 19/08/2019 at 13:23, jm51 said:

How about scrapping stamp duty and replacing it with VAT? The vendor gets a 1% VAT deduction for every full year that they've lived there.

It will help VAT registered builders and discourage wannabe house flippers. 

 

On 19/08/2019 at 13:48, dgul said:

VAT is complicated.  Eg, your idea would encourage VAT registration of BTL who'll then have a 20% advantage over normal buyers.

SDLT is actually a sales tax for houses, so actually what you're suggesting, with a proviso that most people get the 'reduction', albeit by a different calculation (ie most don't pay (or don't pay much) for a simple OO transaction).

I'd suggest that they should remove CGT from primary residence -- that would take the heat out of rises and not hurt house transactions during crashes.  While they were at it they could also sort out CGT -- by giving everyone a £5k allowance that can be held for 10-20 years (removes the CGT bung for the wealthy, allows the long term holder to not see the CGT but hurts flippers).

They should also have a default 'business rate' for all houses, with a rebate for OO and an allowance for individuals who put it through their tax return.  That would resolve most of the current problems with UK property being used to park overseas money, and the 'under the counter' BTL.

LVT is simpler, less gameable and discourages hoarding property and other forms of land speculation which keeps prices down for everyone, yes it does punish "little old ladies living in massive houses with low income" well fuck em they can move to smaller houses.

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On 17/08/2019 at 16:39, Castlevania said:

My initial thoughts were it’ll push up selling prices, but first time buyers (who are those struggling to get a deposit together) are already exempt from paying stamp duty on the first £300k which will cover most housing in the U.K. I don’t think it’ll have that much of an impact.

Lots of owners selling their houses cheaper but charging a fortune for carpets, fridges, curtains!

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On 17/08/2019 at 17:18, Gloommonger said:

We are in the process of buying and due to exchange end of September. Are these changes usually implemented immediately or will there be a cooling off period? I think I might delay until end October and save 10k!

I'd have to disagree with Cunning Plan, most of the time HMRC allows a grace period if you are already part way into the process. Normally they'll put a proviso on it that if you have already engaged a solicitor, for example, then you will have to stick with the current setup. Everyone else they will apply from midnight.

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