New tax if selling house in Scotland

[EddieReadersglasses]

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

tabulah top marks for effort but those houses are both 20 miles at least from where we are. It is amazing the variation in house prices locally. If we lived in highlands or borders we could buy a big enough house and have a tiny mortgage. However we have friends here, my kids are happy at school so it wouldn't be right to move.

We are going to email our solicitor tonight for more guidance and then approach the developer to see if we can renegotiate the price.
If not then either stay put or try to find a non- new build which will drop in price a similar amount to ours so be less of a hit.

As others have said the premise of the change is good, it's just the jump from 2% to 10% above 250k that sticks in my throat. And then only 12% on anything £1million.
Why not 6% up till 500k? It would have still cost us a bit more but not enough to stop us moving.

I have no idea where you are, I was looking close to Aberdeen and I like looking at houses, lol.

Like I said, I do feel for you, I just don't think it's an unfair system in itself.

If it will fall into the period of time where it changes over - I think your developer will negotiate with you, mine was a new build when I bought it and once you're committed they're fairly reluctant to let you go again.

I wonder how many English people will find it unfair if this scheme is rolled out across the country? bit like the poll-tax really...

Why would it be rolled out across the country?

Why

And it's nothing like the poll tax. Poll tax is linked to electoral register, it is a flat rate tax imposed on every adult.

Thus is stamp duty a tax paid when you buy a house based on the market value of the property.

Thanks tabulah it's nice to be able to disagree without any meanness

Stamp duty and poll tax and mansion tax if it ever comes are all the same - they bear no relationship to how much cash you have. You could have a London flat with 100% mortgage and no savings and because it is worth £2m even though you have not a bean to your name you pay it. It is the same point as VAT on things other than food and heat - you pay it whatever you earn. SO people feel these kinds of taxes are unfair.

I've posted this on the other thread here is a calculator which will tell you how much you pay under the new system.

Wealth based taxes are actually much fairer than income based taxes - the rich pay either, but hard work in a lower earning job is not penalised.

Greengrow...how big a mortgage you can get is directly linked to your income...so it's hardly a completely unrelated figure, is it?

Taxing those with no wealth on wealth they don't have is even more unfair than taxing OAPs with low income who have a £2m asset. At least they don't have full time child care and £90k a year interest on their mortgage to pay

To get a mortgage for the amount where you're paying more tax than now...you need to be making about 5 times the national average salary, which btw means that one year's salary would buy a nice 3 bedroomed semi in commuting distance to Edinburgh (mine for instance) or a not very nice area of Edinburgh itself.

That's not wealth? Having an annual income that will buy you a family home outright?

That person could live my life and save enough in 2 years to buy a house better than mine...and my life is ok, I'm not doing without much. I mean you know, given a choice I'd have designer shoes, but I'm not suffering.

Anyway the UK won't get a mansion and if it does my house will be under the limit and I won't move house until I die so will not be paying stamp duty - sorted.

We have a lot of equity and I suspect our mortgage is not that much bigger than lots of people- so you can't possibly know what our income is. You can buy a 3 bed house in Edinburgh for (well) under 100k??
We have been overpaying our mortgage for 10 years. Making lots of sacrifices along the way. Please don't assume you know what we earn. And bear in mind any rises in the value of our existing house is reflected in the house price of our proposed new house.

I wasn't talking about your income...I was talking about the income needed for a £400 000 mortgage. It kind of drifted off from your situation.

Ok no worries. Our mortgage will be less than that luckily

I don't know much about this tax. But it seems a sensible alternative to the mansion tax. It will be a one off tax paid for by people that can afford very expensive houses. What could be fairer. (Unless you are as poor as a church mouse but can afford to buy an expensive house.)

It is quite possible to have a lot of equity but not a high income. A forced move to an expensive area such as Aberdeen could then become very tricky.

I spent the morning with someone frmo French (but a tax refugee in the UK).. much talk of their annual wealth tax including not only on your home but savings and other things of value and now a new proposal over there to pick professions like medicine, law, pharmacists and ensure they do not make too much profit so even if you cut your costs right down, work from your house to save costs any costs savings will be taken as additional tax (that is after 70% of your turnover is already taken for expenses and other regulatory fees)... did not make me want to move to France.

If someone above is saying if you earn 5x the average earnings - say £100k a year - do remember people don't keep £100k. About half goves to the state ni tax. Also most of us who work full time in cities with 3 small children pay about £10k per child in child care full time so about £30k a year and we have the interest and repayments on the loans so even if we never eat out or buy new clothes or whatever it is not the case that we can "save" and pay in cash for a house because of how high taxes now are on upper incomes and the costs for men and women to work full time in terms of childcare and transport costs. No one expects anyone on mumsnet to cry for women who earn £100k a year but the bottom line is if you piss off higher earners they move where they are wanted and the poor suffer and the tax take reduces.

I would not with these levels of stamp duty and the uncertainty over differences between English and Scottish taxes and attitudes to the well off now easily consider buying anywhere in Scotland and no doubt some Scots (despite my Scottish genes) would think lucky Scotland to avoid my presence but it will have an impact on investment there.

"£100k. About half goes to the state in tax."

Which country do you live in, that has no tax allowances, and no tax bands?

No, the imaginary high earner was living my life and could save the rest...I do realise that in actual fact they would have different outgoings.

But I was illustrating the point that actually, that is wealth, having an income of at least £100 000.

100,000 gross

10,0000 personal allowance - zero tax
31,865 basic rate 20% £6373 tax
58,135 higher rate 40% £23,254 tax

total tax is £29,627

well under a third.

Not half.

£35k tax calculators say on £100k, but some of us sadly get no single person allowance at all these days and pay almost 50% tax NI on most of our earnings.

So our £100k woman with small children has £65k in net pay. £30k goes on her childcare for 3 under 5s in London. That leaves her £35k. Let us say she lives where I am and commutes to London so has about £2k a year travel costs and her clothes. She probably has a student loan which is taken off her salary too. Her mortgage repayment or rent is likely to be at least £14k a year £19k so far net pay left from £100k less whatever the student loan repayments are 9%? She is probably worse off than a woman on benefits in topsy turvy UK where we bite the hand that feeds us. She is not able to save up to buy a house for cash in a year from her spare money.

Why is she suddenly in London?

" She is probably worse off than a woman on benefits "

Absolute nonsense

I get the feeling you have no experience of being poor. Furthermore you have no ability to conceive of the lives experienced by those who do.