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Original poster

New tax if selling house in Scotland

143 replies

EddieReadersglasses · 11/10/2014 14:01

Just wondering if anyone knows the ins and outs of this new tax.
We agreed to buy a house in January this year but it won't be built till July 2015. Tax changes mean it could cost us tens of thousands of £s more which makes it completely unaffordable. However we will conclude missives prior to the change in system. Does anyone know whether this means we will pay current stamp duty rates or still be stung with new higher tax rate (10% of sale price!)
Causing a huge amount of worry for us as currently looking like our dream house will just not happen

Trawling the internet for information but not much to be found

OP posts:
TheBogQueen · 12/10/2014 19:58

The market won't stagnate. The cast majority if houses in Scotland don't cost anywhere near £325,000.

If you can't afford a more expensive house then, well, that's life I'm afraid.
I can't afford a new car.

tabulahrasa · 12/10/2014 20:03

I've no idea about the areas...but that and and that are fairly mansiony to me.

That's not a mansion, but, it's a pretty nice house in an easy commute to Edinburgh next to the pentland hills and depending on which catchment area it's in either with a good or very good secondary school.

Still better than just average in a not too bad area of Edinburgh and it should be in catchment for an ok school.

peggyundercrackers · 12/10/2014 20:10

Aga most of those houses re pretty much in the middle of nowhere that's why they are cheap... Very few people want to live in these areas because there is little employ,net and little of anything to do really.

whattheseithakasmean · 12/10/2014 20:11

I think it is good if it discourages second home owners - they are bad for the local community and price people working in the local economy out of the market.

peggyundercrackers · 12/10/2014 20:13

If you want to see mansions for sale look at www.ckdgalbraith.co.uk

SDTGisAnEvilWolefGenius · 12/10/2014 20:13

If you need to live somewhere in the central belt, or easy reach of the big cities, I think that £325,000 is far more likely to get you a fairly ordinary 4-bed on an estate, than a 6-bed manse.

I'd love to live in some of the houses AgaPanthers linked to! but none of them would be practicable for dh's work, which needed an easy commute to Glasgow and proximity to an airport for all the meetings he has to go to in London.

tabulahrasa · 12/10/2014 21:14

6 beds and a sauna needs a bit of work to be fair, but it's close to Glasgow and the airport.

Or not as big but in better condition and still not a 4 bed on an estate.

Original poster
EddieReadersglasses · 13/10/2014 10:39

None of those houses are within 100 miles of me, most are over 200miles away so not really an option.
I would love to be able to buy a decent 5 bed house in this area for less than 400k but it's not going to happen

As an aside I've worked out the tax we would have to pay to move is equal to a whole years combined household income for us. So all of those 'I'm alright jack' type people on this thread - would you be happy to have a tax bill equal to a years earnings (combined household income) just for moving house??
You seriously think that is a fair tax?

OP posts:
Original poster
EddieReadersglasses · 13/10/2014 10:45

Oh and while we are talking about mansions Hmm I should point out our existing house is a 4 bed semi.
Our new house would be detached. As it is we will be stuck with the noisy neighbours I am desperate to escape from.
And as for new cars, dh and I both drive cars that are about 10 year old. And the last foreign holiday we had was 8 years ago. We've not even had a holiday in Scotland this year so we could save money for moving house a year later. We are not exactly swimming with money, we just live in a very expensive area.

The responses on this thread have made me feel for the first time, glad that there was a no vote (I voted yes)
Clearly anyone who earns above average (even if it's just a little above average) should be hammered with tax. Pretty sad and nasty tbh

OP posts:
peggyundercrackers · 13/10/2014 10:48

eddie its pointless trying to reason with some people - they think that because they cant afford it you shouldn't be able to either. it doesn't matter to these people that you have a good education and have worked hard to build yourself a better life sacrificing lots of things along the way. they think your rich and your going to have to pay to support them because its just not cricket any other way!

Original poster
EddieReadersglasses · 13/10/2014 11:04

Thanks peggy you are probably right, I'm wasting my time here really. Smile
I always look for the best in people but I don't always find it unfortunately

OP posts:
peggyundercrackers · 13/10/2014 11:08

the system should be encouraging people with more money into it, to create prosperity, to create a better life and to aspire to a better life whereas all they are doing in this system is discouraging people to move, discouraging people from spending money - instead its a race to the bottom... absolutely fucking depressing.

CaptainSinker · 13/10/2014 11:34

Well this will affect me and I am ok with it.

Money has to come from somewhere. If there's measures take the heat out of the more overpriced markets (eg the North East), surely that is a good thing.

We can't always have we want. If affording a big house in the right area is such a stretch then compromises have to be made.

tabulahrasa · 13/10/2014 11:35

That would be £4200 extra in tax over the current tax.

Bit further out from Aberdeen, but cheaper, it could even be under the point where it's more tax anyway...or very little extra tax.

Yes they cost more than they would in other parts of the country, but, they're hardly average sized houses either!

Like I said, I do appreciate that it must be worrying to have made plans that you can afford and be possibly having to alter them - but that doesn't make it an unfair system, I'm sorry, but it doesn't.

PigletJohn · 13/10/2014 11:38

In my life, there have been some quite considerable ups and downs.

I have always considered that it is much better to be prosperous, and pay quite a lot if tax, than the reverse.

There has been no particular correlation between hard work and prosperity.

Greengrow · 13/10/2014 12:11

Eddie, it's just like on the UK mansion tax threads I have been on. People think it will never apply to them but of course they are happy now the supposed "rich" have to pay more but won[t be happy when the UK "mansion tax" (tax on London) is moved down to more average price houses as it will be just like the ATED (that tax began at £2m houses held in companies and very very swiftly is moving down to £500k properties form next year), They won't be laughing then nor if these new higher taxes make people with money avoid that region or country.

There is a correlation between hard work and prosperity. Most people who earn a lot work pretty well (I've worked at least 48 weeks a year often 6 - 7 days a week for 30 years without a break, not even for maternity leaves for 5 children so not surprisingly I earn quite a bit.). That does not mean some people like my cleaner work very hard too in 2 or 3 jobs but on the whole if you earn a lot you tend to earn more than people who don't.

LoveVintage · 13/10/2014 12:33

Come on people. The OP is upset because she was to be buying a house they COULD afford in relation the area she works and children go to school, and now the goalposts have been moved, so regardless of views on the rights and wrongs of the taxes, no wonder she is upset.

OP for what it's worth I work in law and can see how this us going to affect people personally though it will hopefully help levelling prices in the longer term - no help to you though. Also we used to live in Aberdeen and could not afford to buy a big house, so we had to up sticks and move jobs to somewhere cheaper - Edinburgh.

I would speak to your solicitor and get them to sound out the developers. You won't be the only purchaser who is panicking.

Original poster
EddieReadersglasses · 13/10/2014 13:16

I'm happy to pay extra tax, proportionate to what I earn. But to pay tax equivalent to a years earnings in order to move is not proportionate! It's just because I live somewhere expensive not because I want to live in a mansion.
If everyone else moving house faced a tax bill equivalent to their combined annual income this thread would be very different.
Stamp duty and this new tax doesn't take income into account. Tax should be linked to income, not to how expensive an area you live in

OP posts:
tabulahrasa · 13/10/2014 13:19

I do feel sorry for the OP, it's rubbish that she's been scrimping and saving for something and suddenly the goalposts have moved just as it's within reach.

But that doesn't make it inherently unfair, I can feel bad for her while also thinking that £4200 in extra tax on a 5 bedroom detached house in one of if not the most expensive areas in the country isn't really a huge price hike...

Most people will pay less in tax, the houses that are affected even in expensive areas are not average homes, that isn't unfair.

The OP is in a tricky situation because of the timing of it, so yes, it sucks to be her right now and I really do hope that either her house just misses it or she can negotiate with the developers, but I still think the new system in itself is better.

SDTGisAnEvilWolefGenius · 13/10/2014 13:23

I honestly do not think the new system is fair. If someone can explain to me how it IS fair that there is one huge leap in tax at £250,000, and then a small rise in tax at £1,000,000, rather than several incremental steps up in taxation between £250,000 and £1,000,000, I will be very surprised interested to hear what they have to say.

TheBogQueen · 13/10/2014 13:50

Bloody hell peggy

Shock
PigletJohn · 13/10/2014 13:50

Surely you need to take that up with your MSP.

None of us on here set the rules.

TheBogQueen · 13/10/2014 13:53

We moved 400 miles north because we couldn't afford the cost of living in London.

Hard work Snd good education has nothing to do with it. The economic reality is that at some point, some people are not going to get what they want. But at least this tax will make thkngs slightly easier for people who earn less and struggle more

tabulahrasa · 13/10/2014 13:53

Because it's not 10% of the whole purchase price, it's the same rate up to £250 000 and then 10% of the amount after that.

So at £300 000 it's 2.4% of the purchase price and gradually rises until at £900 000 it's 7.4%.

Currently if a house is £1 over a threshold you pay a different tax rate, because there's the initial £250 000 for every house over that price it isn't a sudden jump at all.

Greengrow · 13/10/2014 13:57

Eddie, my daughter and her new husband just paid £30k stamp duty in London. My other daughter paid £10k - the very generous sum her father gave her for the purchase - that all of it went just on stamp duty when in other parts of the country starter 1 bed and 2 bed flats are not even subject to stamp duty is very unfair for hard working Londoners already paying 42% tax/NI. As you are saying it is like a year's income just to fund the tax on a move. It stops people moving jobs or houses. I refuse to pay massive stamp duty and will die in this house in due course. If there were not huge levels of stamp duty people would be more mobile and employers would recruit better people.

Also when tax for middle to upper earners gets too high the state tends to take less tax in so the poor suffer ultimately.