the Stamp Duty Rip Off(9 Posts)
Have been reading in the press this weekend that 98% of parliamentary constituencies are being hit by stamp duty compared to 13% in 93. The threshold has not been raised since Labour came to power in 97. Only homes costing under £60k escape the tax (where are these houses at £60k?? - mainly Scotland it says)
According to the report 'the stealth tax has been a huge money spinner for the Government' (no shit!) 'with stamp duty income across property sales up from £675 million to £4.3 billion a year since 1997.
Apparently Mr Brown is thinking of doing something about it - the Halifax say the threshold should be £156,900 but he's not likely to go that far (god forbid! )
For the record the duty was a universal 1% before labour came to power but now is stepped at 1, 3 and 4%
It's so infuriating. Particularly as it puts a glass ceiling on the value of my house, which I hope to sell in the next few months, because my house is worth around £250k but we'll struggle to get any more than that 'cos SD rises from 1% to 3% @ £250k, therefore house value has to be at least £275k in order to justify the hike
I'm sure there was a 3% band before 1997, Joolstoo...
Last year we were in a bidding war on a house listed at £255k & it was obvious that the other bidders were willing to pay over £250k, no problem, they weren't put off at all. There were lots of houses priced around £260k when we were looking last year, and we knew that the vendors expected to get that price, too. Maybe it depends where you live...
There are also houses priced at £260k in my area, but most savvy buyers tend to either offer under that price or just not bother ! It severly limits your market
Usually if you make an offer of just over £250k you ask for some of that to be considered towards extras such as carpets etc, bringing down the amount for the property to under £250k. The apportionment has got to be "reasonable" and I think that you may now have to disclose it. It also afects the mortgage calculation, but usually people have some equity at that price so isn't a huge deal.
actually stamp duty is a good idea. if it wasn't there, then house prices would only rise by an extra whatever % to cover it - markets have a way of increasing to fill gaps like that. They could come up with some kind of discount structure for first time buyers or even anyone who is buying a family home (as opposed to a holiday home or investement property) though.
In Spain you pay VAT at 7% on all house purchases, or more if its a new build. ouch.
What gets me is that the % is for the whole of teh price - if it was 1% for the first £60k, 2% for the next &150k over and above the 60k etc, then you wouldn't get that difficult £250k artificial break. And it would be fairer, too.
I think the whole thing is outrageous - and I think 1st time buyers should not be charged it. Then you would only pay when you are buying / selling having made a profit on the rise of property values.
Much better value to increase the size of your house, if you can, by extensions, loft work etc which come free of stamp duty rather than move.
Same tax theft issue with inheritance tax - the threshold has NOT risen in any way in line with what people tend to leave in their wills, so wheras this tax was previously only hitting the wealthy, it now clobber a much higher majority of people - No incentive to change these thresholds for them, is there!!!!
Here's a quote from the Times online about the Budget
"There may be disappointment also for aspiring homeowners hoping to receive a pre-election concession on stamp duty. This weekend, Halifax is publicising the impact of this tax, producing research showing that first-time buyers could now pay stamp duty in 98 per cent of constituencies, against 13 per cent in 1994.
Yet there are few signs that Mr Brown is prepared to abolish stamp duty on properties sold for £60,000 to £250,000. Mr Stevens wonders whether the Chancellor could opt for a general review of this tax, so postponing any decision.
If Mr Brown is minded to take more immediate action, Mr Durman suggests that he could change the basis of calculation of the tax. At the moment, if you buy a £260,000 home, you pay 3 per cent stamp duty on the whole amount £7,800. This could be cut to £2,200 if the tax were levied at 1 per cent on the band above £60,000 but less than £250,000, and to 3 per cent on the balance. "
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