To think new stamp duty is unfair on London AGAIN

[stupendoushorrendous]

Aibu to think that the new stamp duty rates will unfairly hit Londoners compared to an equivilent person (in wealth terms) elsewhere.

Example, Family bought their house for say £300k many years ago, value has gone up considerably. If they want to move to a different house of equivilent value they could be subject to over £100K in stamp duty. Their mortage could be doubled simply because they want to move.

Surely, this increase in tax could mean it is impoosible for some Londoners to move locally should they need to.

unlucky I mean - maybe I am just naturally positive

You have to find the job in Birmingham though - that is the tricky part.

Is it?

TBH you'd have so much spare cash that you could take quite some time to hunt for the job!

I know lots of people (myself included) who have worked in London for a short period of time and then moved out to the regions for a better standard of living and more affordable housing.

It will only stop the house price madness in areas where housing costs over £900K - prices here for a normal 3 bed family home will go UP.

Less tax to pay = can afford to go higher,
selling for £260Kor £510-£520K - can do that now much more easily rather than have to keep it below the threshold....

It will fuel a mini boom outside London and the SE.

Walcatz if you are in a chain, hopefully everyone in it has been hit the same (negative) way. Maybe with a little negotiation everyone could agree to accept a lower price to cover the short fall as its unlikely anyone will want to lose their buyer this close to exchange.

Its a bit of a nightmare but it could be done. Fingers crossed for you.

You have to find the job in Birmingham though - that is the tricky part.

If you wait long enough until they have finished HS2, there will be loads of people moving out of London, living in Birmingham/Manchester/Leeds etc and commuting to London, using their London property equity to push house prices in the north even further out of reach of people working in the regions without the opportunities that are only in London, while still complaining that, despite being vastly better off than 95% of the population, they are somehow hard done by. It'll probably be the cost of the season ticket.

Because if you live in the north and most of the jobs available are zero hours and/or minimum wage, you'll just have to keep sucking it up while all the investment and opportunities continue to be targetted at a tiny overprivelidged distant corner of the country.

How many people live in London now - 8 million?

People are not living in little houses in the suburbs of London with an hour long commute because they like the idea that one day they might visit the museums. They live there because they have a job there, and if they lose that job they are more likely to find another job.

Of course there are jobs outside London - it's great if you can live in a lovely place outside London and have a nice job. There just aren't enough jobs outside London. People commute from the midlands and the south coast to work in London because they have to move that far out to find affordable housing but can't find a job elsewhere.

If I had a million pounds of London housing equity, I wouldn't sit around moaning about my lot, I'd cash it in, spend about a tenth of it on a house in rural Andalucia and invest the rest of it to provide an income to last the rest of my days.

I think it's quite interesting that they've basically copied the new Scottish system, but made it cheaper in the £250k-£1.5m bracket. kind of trying to take the wind out of the SNP and the Mansion Tax sails simultaneously IMO

The Scottish system means people will pay more above about £350k than they did under the current (old) system, and will pay more than England/Wales above £250k under the new system

YANBU. Stamp duty and the threshhold for IHT should be linked to the local house-price index.

I agree with you Ilkley, it's just that I would imagine it is just as likely that people who would have moved from the north to London just stay in the north. Most Londoners come from elsewhere. (OK, haven't actually got the facts to back that up, but according to wiki almost 40% were born outside the UK, so I think it's fair to guess that at least another 10% weren't born within the sound of bow bells…).

But anyway, the point is there should be more investment outside London.

OnIlkley, but some of us want to live here - our friends and family are here. My job is a 15min walk from our house, my DH's a 30min bike ride. We live and work in zone 2. The value of our house is of no use to us as we don't want to move out of London. I don't want to move to Birmingham or anywhere else, I like it here in our little community.

Although it will affect us badly, I do hope it will start a housing boon outside of London - everything is so inequitable at the moment.

If you have that kind of money though you can afford it.
Also, it isn't reserved for Londoners its the same throughout UK its national.

The reality is however than not everyone in London has to move. If you're lucky enough to live in a million pound property in London and you can't afford to buy a bigger house because of the stamp duty then you stay put.

Or you move out and buy a bigger house and commute in or change jobs to enable you to move to a different house elsewhere.

Re the council tax. I'm renovating a house - slow going at the moment - because it has been empty for more than a year (and for some time the previous owners were in a home - so exempt - but that time counts towards the year) my council tax for it is 200% - not a typo - double.
Not happy but I do see their point (not the someone being in a home part of it - think the year should start from when you buy it but that's another story)
If it was a holiday home or a second home I would get an indefinite 10% discount.... (I'd be tempted to call it that if it was habitable - unfortunately right now it isn't...)

But why would anyone need to move locally but stay in the same size house?

Chaz
irregular#
Actually those buying 1 mill properties and just above are better off! you used to pay 5% on the whole lot. Worse off at 999,999 though

[confused[

^That is wrong. I am not sure what calculations you are using but they are not the same as anyone elses.

The neutral point between the old and new system is 937K - above that you are worse off and below better off.^

No it is not wrong.

Here is a graph: www.thisismoney.co.uk/money/mortgageshome/article-2859114/Stamp-duty-cut-homebuyers-Osborne-kills-hated-slab-tax.htmlChart

On a million pound property you now pay £43,750. It used to be £50,000.

I am not sure what calculations everyone else is using, but they are wrong!

You pay more from £937,500-999,999 then less again until just above £1.1mill

I disagree OP. I live in a house worth just over £1m (London, bought it for less) and when we move we'll likely move to a house worth £1.5+ And I honestly don't think it's unfair.

Surely a tax that only targets 2% of a population (or in this case transactions) can only be fair, even if this means I pay more. I can afford to pay more, I don't mind doing so.

exitpursued

"But why would anyone need to move locally but stay in the same size house?"

Maybe they need to be closer to a school when their child moves to secondary? (not talking about catchment here because that's a whole different story)
Maybe they need a different configuration of house in order to accomodate an elderly relative?
Maybe they need close access to certain amenities for whatever reason?
Maybe they have been burgled and no longer feel comfortable in that particular house? (This has happened to someone I know)
Maybe their job has changed and need access to a completely different tube/overland line?
Maybe they have ageing parents and need to be able to check on them regularly and therefore need to move very close to them in order to juggle work and care.

There's just a few.

Solution for Londoners is a 50% cut in prices.

HTH

I disagree OP as well. Similarly to Fromage...we live in Streatham in a house now probably worth c£1.2m. We bought it a few years ago for quite lot less and have probably benefitted by an increase of £100k a year. Mad I know. Stamp duty was painful then, but we budgeted for it. When we sell, we will almost certainly be downsizing and so won't be paying the increase in Stamp Duty... but if we were to upsize, I think that would be fair enough.

If we had stayed in the south coast town where we used to live, we would not have benefitted by such a huge increase in value - we wouldn't be in the £1m+ bracket, and this wouldn't be an issue. So no, this is not particularly unfair on Londoners.

Do feel sorry for the PP who is in the middle of the process and has been hit by an additional £50k bill. That is very tough.

Tax has to come from somewhere (I pay a lot!) and this is one of the Tories more sensible decisions. If your pensioner wants to move to a similarly priced house, use the equity accrued!

aga

I think many Londoners would agree with you.

They could move up the property ladder without moving out of the city and they could get an extra bedroom without having to find another few hundred thousand quid.

My heart bleeds.

irregular
The 5% rate didn't apply to 1 million properties but properties over 1 million so it was 40K on a 1M house and 50K on a 1,000,001 house.

The old and new rates are here
www.hmrc.gov.uk/sdlt/rates-tables.htm#3