What's the reason for stamp duty?

[Notmycircusnotmyotter]

To think stamp duty is an absolute scam

Why do we have to pay huge amounts in tax just to change our home?

My father is elderly. To allow me to look after him at home, I am going to sell my family home with my two small children to buy somewhere he can fit too. It'll save the state a fair chunk in care fees. But because we're in the SE England, it'll cost me about £50k in stamp duty. Just to change upsize my family home. What the actual fuck.

So we can give the government money for the pleasure of buying a house. Ridiculous.

It's to raise money to fund the war against France!
You're not wrong OP.

It’s to pay for wars with France.

It’s tax. That is all. Like many we pay. Shite but there you have it.

Oh, and tomorrow we march in France…

It's just a tax on buying a home just like you pay tax on almost everything you buy (like VAT).

I do agree that it's unfair that it's linked to house value alone when houses vary in value so much. Someone in one part of the UK could sell their 3 bedroom house and buy another 3 bedroom house and pay no stamp duty. In a more expensive part, someone sells their 3 bedroom house and can't afford to buy another because the stamp duty is so high.

I think it should be linked to some kind of local index or should be based on the increase - i.e. if you have a £150,000 house and move to a £200,000 house then you pay stamp duty on the £50,000 difference instead of on the full amount. That way, people aren't trapped in properties when they can't afford to move.

Ha I know the history and it makes me giggle. Can we please lobby the government to sod the f* off now we aren't waging war with France? I want to sell my house so I can get one more suitable for my father to move in but the stamp duty will cost £50k

I’ve always thought this too. It makes no sense and infuriates me. I like change and it prohibits this

I looked it up:
Stamp Duty was first introduced in England as a temporary measure under the reign of William III and Mary II. The primary aim was to raise funds for the war against France, marking the tax's origins as a tool for financing military campaigns and other government expenditures.

It raises around £15 billion a year.

Absolute scam.

What's all this talk of France? Is it a historical reference I am not getting?

My home is worth about £700k. A lot of it is added value from work I've done to the house. It's a terraced in a not very snazzy part of Surrey. I want to buy one around £850k. It means I'll have another double bedroom and a downstairs loo for my elderly dad. But that extra £40k in stamp duty is just 🤯

It's a wealth tax nowadays, I guess, but one that affects more and more people who are not wealthy.
Sorry to go off topic, but will your plan to buy a bigger home in order to care for your dad still work for you if he needs to go into care? It can happen so quickly, sadly. 40K is a huge amount if accommodating your dad is the only reason for the move...

If we enforce the Treaty of Troyes we could abolish stamp duty and probs knock a few pennies off income tax

Its not a "scam". No-one is trying to pretend it is anything other than what it is.

Governments need to raise money. We might not be waging war on France but we need money to arm for future wars against current and future threats, to pay for the NHS, to build infrastructure, to fund care and pensions and everything else that the state does.

Tax has to be raised from somewhere. This is just another one of those ways.

@BigDayForTheWomeni earn well and I'll do anything to keep him close. He's amazing, the best father ever, a wonderful grandpa... it would take the end of the road for him to go into care.

I thought that was income tax! Maybe both are.

OP, I always thought it's kind of an odd tax. Because if you and I swap identical houses we pay. If we stay we don't.

I guess you can argue most purchases attract tax in the form of VAT and this is the equivalent. But it acts as a tax on moving and we want the population to be able to move.

Or you could argue investments attract tax in the form of CGT. But only on the gains. And we explicitly allow people to invest £20k a year into S&S ISAs to avoid tax and encourage investing. I suppose we don't want to encourage too much investment in the housing market though. And if you exempt your main home completely from stamp duty it's an incentive to sink all your cash into one giant property.

Income stream for the government, like any other tax.

It feels like theft even more than usual taxes.

Paying £50k to move house is absolutely bat shit.

A mortgaged family is not "wealth". It's how the middle class in the south have to live. I'm a single parent of two with a decent salary who wants to care for an elderly and increasingly frail relative - yet to do so will cost around £50k

What @SpanThatWorld said.

Also, you don't pay it on the first £125K, and then it's 2% up to £250K, and 5% up from there to £925K.

So if you're buying a house worth £850K, you'd pay £32.5K, not £40K.

It you can afford the new house, that's great. Wonderful for your dad to have a home with family as long as he's able. May he live long and prosper.

@BigDayForTheWomen I just feel really pissed off that it's going to cost me half a year's salary just to move house. Im not buying my 4th private jet / mansion / yacht, I just want to sell my family home to one that will accommodate my ailing father, albeit in a very expensive area that I grew up in

Have a look at what you’d pay on the same property in Scotland @Notmycircusnotmyotter and it might make you feel better! 😅
I know, I know, property in Scotland is generally cheaper. But Edinburgh prices are similar to SE England and the tax is shocking - also very very limited allowances for first time buyers compared to England.

Ha my friend said the same thing tonight @Wiennetta

Just another way for the government to take money from people.

I was just about to say the same thing! £60,350 here for an £850k property 🙄