Home Stamp Duty – a cut for First Time Buyers, don’t be fooled.

[Isitmebut]

Similar to the lack of new homes on their watch, UK Home Stamp Duty is where it is due to Labour’s focus on a ‘tax high, spend badly’ UK economy getting its priorities wrong; choosing to grow the size of government at the expense of the private sector.

Labour, Chancellor Brown and his advisor Ed Balls came into power in 1997 and inflation adjusted house prices were subdued, the Stamp Duty was 0% up to £60,000 and a Flat 1% above £60,000.

”History of Stamp Duty Taxes”
www.stampdutyrates.co.uk/historic-rates.html

But AFTER Labour came into power Stamp Duty rates were raised in 1997, 1998, 1999, and 2000 - and by annually not keeping the increases in thresholds in line with home price inflation during rampant Home Price rises - more and more were paying punitive rates for having the aspiration to own, or move home, as families grew.

“Stamp duty: millions more being dragged into tax trap”
www.telegraph.co.uk/finance/personalfinance/houseprices/11004647/Stamp-duty-millions-more-being-dragged-into-trap.html

“Boom in property prices means that a quarter of homebuyers are paying stamp duty of 3 per cent or more, up from just one in 10 in 2003”

And what the taking away of Stamp Duty for lower priced homes does to put upward pressure on home prices in that sector, especially with no firm plans to build the 200,000 promised in their manifesto, is another story.

So unless a 2015 Labour Party has changed its previous ‘big government’ ways, what Ed Balls giveth, he taketh a shed load more £££ elsewhere.

The ‘catch’, funding, or second leg of this policy to be announced AFTER the General Election, is likely to be for those higher up the housing (food) chain, as the Labour and SNP manifesto promises of ”fairer taxes” fully manifests itself.

As we see above, the first thing a Labour government did in 1997 was hike up the Stamp Duty to ‘squeeze The Middle’ Mr Miliband has pretended to represent over the past 5-years, and it was one of the first things an SNP free to set its own tax rates, put through.

So would it be too much of a stretch not to assume that a Westminster ”progressive” SNP agenda propping up Labour from May, would not insist that on top of their share of the English Mansion Tax spoils, would be a ‘harmonization’ of Home Stamp Duty between Scotland and the rest of the UK?

October 2014; ”Scottish Budget: Boost for first-time buyers”
www.bbc.co.uk/news/uk-scotland-scotland-politics-29536022

^"Homebuyers in Scotland will pay no tax on properties costing less than £135,000, Finance Secretary John Swinney has announced.
And a 12% marginal rate for houses costing more than £1m will come into force next April, when stamp duty is replaced north of the border."^

"Under the government's new Land and Building Transactions Tax, a marginal tax of 2% would apply to the proportion of a transaction between £135,000 and £250,000, while a 10% rate will apply to those between £250,000 and £1m"

January 2015; ”Scottish government revises property tax after UK stamp duty changes”

www.theguardian.com/politics/2015/jan/21/scotland-property-tax-stamp-duty.

“The revised scheme announced on Wednesday has a higher starting rate and includes a new band of 5% tax for properties priced between £250,000 and £325,000. The 12% marginal rate will now apply to houses costing more than £750,000,* rather than £1m.”

Blah blah blah..anything but the nest lining Tories ..thank you

So your argument is that the cut in stamp duty will be offset by a rise for those further 'up the food chain'?

Ooooohkay......

The OP might have already said this, but Labour's new policy will just raise the prices of the first time buyers' homes by £2-3000. The beneficiary will be the vendor, not the first time buyer.

It won't transform the housing market because houses in that bracket are a scarce resource. If more money is available, the price will go up. Economics 101.

Ah yes it's much easier to grasp that from your post. Particularly as you don't use the phrase 'food chain'.

Tee hee … I thought the Daily Mirror readers always concentrating on 'capitalist bastards' word plays, not Labour policies would ‘like’ my Labour/SNP reference to the “housing (food) chain”, but you are not getting my point.

Both Labour and the SNP would like us to believe their policies attack the top of the chain and give to the bottom – but neither Labour’s policies nor the food chain works like that, as in both, everyone in-between gets attacked or eaten.

In the early 1990’s to 1997 home prices were weak after the recession, especially in inflation adjusted (real) terms, so there was no real need to raise the Flat 1% Stamp Duty rate.

After the 1997 General Election, the banks were let of the lending leash and prices of the average home was going to go up from £73,000 to £232,000 by February 2008 – so Labour smelt taxation blood, but as in everything else they taxed on the way up, relying on those taxes post crash, they couldn’t lower them when home prices fell an average 20% - especially for the ‘Squeezed Middle’ paying the follow ‘slab’ rates.

The Labour higher 3% to 4% on family homes and ‘slab’ meaning those rates were paid on the whole amount rather than benefiting from graduating rates e.g. a £251,000 home would cost over £7,500 Stamp Duty for the privilege of buying/moving home – and as the link I provided showed, more and more were getting dragged into those slab rates.

• Over £250,000 and under £500,000 - 3%
• Over £500,000 - 4%

Under the Conservative coalition still needing taxes to pay off the deficit, Stamp Duty is now only payable on the portion of value of the bracket it falls into. Effectively, the first £125,000 of a property purchase is completely free of tax. The next £125,000 is payable at 2% (or £2,500) etc – which is much fairer.

• Up to £125,000 - 0%.
• Over £125,000 to £250,000 - 2%.
• Over £250,000 to £925,000 - 5%.
• Over £925,000 to £1,500,000 - 10%.
• Over £1,500,000 - 12%

The basic Labour ideology of penal taxes of homes can be seen in Council Tax; in another post I show that for the low priced Band D properties, the average rise under Labour;’s administration across England was 105%, with down in the South East milked as high as 127% - hence I say don’t be fooled by pre election baubles, Labour are the party of high property taxation, AFTER elections.

I think this is a common thing for labour.

The increase taxes for "the rich", and spend the money before they receive it.

They did not understand human behaviour, so the tax revenues never came in. Having already spent the money, they increased borrowing and everyone has to pay.