to think that if sellers are asked to pay stamp duty, that just means that house prices will go up

[chomalungma]

Because the seller will add stamp duty to the price of a house?
So ultimately the buyer still pays it.

It sounds like the Trump attitude towards tariffs.

www.dailymail.co.uk/news/article-7365825/Chancellor-Sajid-Javid-hints-slash-taxes-months.html

But the cost is there either way

Ie if the house is 250k and the stnp duty is 5k, full cost 255k, or the vendor puts the house up for 255k but has to pay 5k out of it

It's all the same

The cost is there - but who ends up paying the extra cost?

Of course and who will agree to paying twice, I paid it when I bought my house, bugger off if you think I'm paying it again. It's an incentive used by builders sometimes but I am not a property developer.

Actually - that's true.
If a house is valued at £200,000 and then say 5% stamp is added on, that makes the stamp duty £10,000 - so the house is now £210,000 - but then the stamp duty becomes more as the house is increased in value.

And what if you need to sell your house because you are struggling for money....

You could end up with a bill that you can't pay.

Plus potentially in negative equity.

Maybe they need to just get rid of stamp duty?

But as a buyer I’d rather no stamp duty and a more expensive house because you don’t notice it the same when you can add it to the mortgage. But as a buyer it’s more money to find up front, along with solicitor payments, other costs, etc.

But how can it be fair on people who have already paid s.d. their property. If a f.t.b. moves in and doesnt ever move they have never paid any s.d.

It makes more sense for someone to pay tax on the sale of their house - effectively tax on a capital gain - than taxed to buy a house.

So the principle makes more sense than it is currently.

However I don’t think this is being a suggestion to tackle house prices.

House prices are too high which means people can’t afford them full stop. We need more affordable homes.

Personally I think we need to bring back social housing for rent for all. Then those who can afford to save to buy can do so with lower social rents giving room to save and they can then move off onto the housing ladder.

It makes more sense for someone to pay tax on the sale of their house - effectively tax on a capital gain - than taxed to buy a house

Depends if house prices go up or go down.

Imagine if you buy a £200,000 house, the value goes down, you end up in negative equity, get separated, and have to pay £10,000 when you sell it. What if you haven't got £10,000?

You’ve already paid SD when you bought your house, and if you sold it and buy somewhere new you’d have paid it on the next place. If they change the system you’ll pay it again on the current one instead. That’s good news if you’re buying a bigger place, bad news if you’re downsizing or moving into rented.

Generally I think it makes sense since sellers will add it on to their house price, so buyers can include that cost in their mortgage rather than having to save up that money as well as the deposit.

It seems totally crazy to me and potentially very disruptive to an already difficult market.

We are supposed to be encouraging people to downsize to free up family homes for younger generations. Add this cost to all the other moving costs and few will be tempted to make that move.

Moreover, first time buyers will find their costs increased. House prices will rise to compensate sellers, but FTB will no longer have the benefit of stamp duty discounts.

Then you cannot sell?

Personally I think stamp duty is an outdated tax.

Better to tax actual capital gains - so if you have a negative equity scenario, then you don’t pay any tax at all. If your property increases in value then you pay tax on that increase when you realise it from selling.

But to add - I think this is a stupid policy anyway.

House prices need tackling but no government has the balls to do it. Mainly because most MPs are personally affected.

I’d rather more government owned property which was rented out to anyone who wanted it, including those in need, or rent controls. Then people could rent at lower prices and save a deposit to buy.

It would also add more competition in the buy to let market and bring house prices down more generally.

YANBU and I would be fuming if they did this.

We were FTB who completed just a few months before the change to FTB stamp duty so we lost out on a saving of 2K. I would be so so so cross if we had to pay again when we upsize.

Or would it be sellers INSTEAD of buyers??

We were FTB who completed just a few months before the change to FTB stamp duty so we lost out on a saving of 2K. I would be so so so cross if we had to pay again when we upsize.

But you will have to pay stamp duty on the house you sell instead of the one you buy, and likely to be lower if you are up sizing????

Silly idea IMO. No-one will downsize without bumping up their sale price to compensate so instead of the market being jammed at the bottom it will be jammed at the top.

I had thought that I would downsize once all my DC are settled in jobs post uni. If I'm not freeing up cash but am just making a payment to HMRC, I won't bother.

The price of houses is determined by 1) the total people can pay - son influence d by mortgage rate and the cost of moving and 2) the supply.
If sellers have to pay the benefits of downsizing are reduced and costs of building go up reducing supply. At the same time buyers costs are reduced meaning they can bid more for a property. Both are likely to cause upward pressure in a tight market or reduce downward pressure in a slack market.

Generally I think it makes sense since sellers will add it on to their house price, so buyers can include that cost in their mortgage rather than having to save up that money as well as the deposit.

I thought that too, but would it actually work that way? The mortgage lender will only lend against the value of the property. A tax charge that has to be paid on the sale of the property isn't part of its value!

The mortgage lender will only lend against the value of the property. A tax charge that has to be paid on the sale of the property isn't part of its value

So the person will need to find more money to make up the extra that the mortgage won't cover?

I can see this being controversial.

Having paid stamp duty when we bought, having to pay it again when we sell means there is no way I will be downsizing. The house has been bought from taxed income, so why should we be taxed again when we sell, having paid sd when we bought?

Larger homes won't be freed up for families - older couples will stay put.

People just won't sell, resulting in a slow down of the housing market.

Looks like it was fake news

www.dailymail.co.uk/news/article-7368817/Sajid-Javid-says-NOT-planning-change-house-buying-rules.html

It would be better to abolish SDLT and to apply CGT onto disposals of all land.