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Another Stamp duty freeze/cut?
117

Designhelp · 21/09/2022 12:25

Would like to know if anyone has any more info in this? Appreciate likely to be speculation at this point.

www.theguardian.com/politics/live/2022/sep/21/liz-truss-stamp-duty-cut-emergency-budget-uk-politics-live#comments

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EmmaH2022 · 21/09/2022 12:27

I don't but having kittens

after a failed purchase last year, I really don't want a cut to result in another insanely inflated market where you have to be the first viewer in order to get the property.

i don't like stamp duty but the market insanity of last time was a nightmare and delayed me looking at all. Prices that were previously insane became worse than insane.

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Overthebow · 21/09/2022 12:28

Yes the market and prices went crazy last time and haven’t gone back down.

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ecochiroptera · 21/09/2022 12:34

How much will that offset the interest rate rises though? It'll rise again tomorrow I believe. Not sure a stamp duty cut will be enough to make the market go insane again. Maybe just prevent it from going stagnant.

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TheSmallestOneWasMadeline · 21/09/2022 12:35

I benefited from it last time but got lucky with the timing as we already had our offer agreed before they announced it.

But with hindsight it sent people absolutely batshit, sellers were over pricing their houses and buyers were falling over themselves to buy them thinking they were taking advantage of the SD holiday when actually they'd probably have paid less overall if it hadn't happened. They shouldn't have extended it to second home owners for a start. But we seem to measure everything based on house prices so Liz Truss is probably gagging to inflate them again, fuck FTBers and all the people priced out of their areas.

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MadeInChorley · 21/09/2022 12:40

There’s already talk in property solicitor circles of clients not completing until after the announcement of any cut.

This is also an England only announcement as stamp duty is a devolved matter and Wales and Scotland haven’t indicated any change. Not sure about NI as Stormont isn’t sitting.

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hannahcolobus · 21/09/2022 13:09

I think any speculation about a problematic housing market will be confirmed by a stamp duty cut. In some places the market is still busy but in a lot of areas it’s cooled completely and this would potentially confirm that a possible crash/reduction in prices is coming as it’s generally a last ditch attempt to prop the market up. As we saw during Covid, the market surged during the tax cut. Although whether it will happen again with interest rate rises and cautious banks is anyones guess.

I know stamp duty is a bit of a broken system and needs an overhaul, but it seems bizarre to cut this now when realistically the only loser is the public purse.

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JesusInTheCabbageVan · 21/09/2022 13:13

I just heard on LBC that it's expected to be announced on Friday. Good for us personally, as we've just put our house on the market. Bad news for a lot of people though, feel especially bad for those who bought in that tiny window in between.

A few people we're forecasting a dip in house prices next year, so I guess this is the standard Tory knee jerk reaction.

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JesusInTheCabbageVan · 21/09/2022 13:14

*were, obviously. Despite autocorrect's absolute conviction that no such word exists.

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Octomore · 21/09/2022 13:18

The stamp duty holiday was once of the worst decisions imaginable, I really hope they don't do it again.

It created an artifical bubble in property prices, an insane feeding frenzy. The amount of money which buyers were able to spend remained the same, so the total cost to the buyer didn't go down - but the amount that would have been stamp duty just ended up in the pockets of the seller instead.

(The same goes for help to buy - its effectively a bung from the government to housebuilders, all it does is inflate prices.)

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Octomore · 21/09/2022 13:20

TheSmallestOneWasMadeline · 21/09/2022 12:35

I benefited from it last time but got lucky with the timing as we already had our offer agreed before they announced it.

But with hindsight it sent people absolutely batshit, sellers were over pricing their houses and buyers were falling over themselves to buy them thinking they were taking advantage of the SD holiday when actually they'd probably have paid less overall if it hadn't happened. They shouldn't have extended it to second home owners for a start. But we seem to measure everything based on house prices so Liz Truss is probably gagging to inflate them again, fuck FTBers and all the people priced out of their areas.

This is spot on. Except in cases like yours (pre-agreed offers) the vast majority of people did not benefit. And artificially inflating property prices is harmful to us all in the long run. It's batshit.

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OttilieKnackered · 21/09/2022 13:22

I would personally benefit from this to the tune of £5k, which for us in our current situation would be a great life line (setting dates for exchange soon, baby on the way).

But I’m not sure I could support it morally on a societal level. It’s hard enough for ordinary earners and first time buyers at the moment. I think a reduction might be more sensible than totally doing away with it.

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Octomore · 21/09/2022 13:26

If you haven't exchanged yet, and a stamp duty holiday is brought in, the feeding frenzy that follows could lead to gazumping, your seller withdrawing their acceptance of your offer etc...

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Octomore · 21/09/2022 13:30

That's the kind of funked up stuff that happened last time, from what I heard.

I have no skin in the game, I'm living in my long term home, no plans to sell or move soon. But I strongly feel that rampant house price inflation is horrendous for society in the long term, no-one benefits from large segments of the population being unable to afford adequate housing.

It's also not good to have an economy that is so reliant on the notional value ascribed to property. I'd far rather the government focused on parts of the economy that are actually productive.

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Roomytrouser · 21/09/2022 13:34

Will be great for bankers as cash buyers with their massive bonuses

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Octomore · 21/09/2022 13:36

Roomytrouser · 21/09/2022 13:34

Will be great for bankers as cash buyers with their massive bonuses

It won't though, not really. The feeding frenzy will inflate prices to the extent that the benefit of the tax cut is erased.

Can people really not see that this helps no-one?

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Roomytrouser · 21/09/2022 13:43

Not if their bonuses are much bigger. The interest rate rise might actually be off putting to those who have to borrow (I have an interest only mortgage on a very historic deal which I have never paid off because until recently the rate was below that of my savings accounts - it has increased from £30/mth to £177/mth).

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Hummingbird33 · 21/09/2022 13:44

I wonder how quickly it would take effect... not far off exchange!!

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EmmaH2022 · 21/09/2022 13:47

What happened last time about properties already in conveyancing?

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EmmaH2022 · 21/09/2022 13:48

Octomore · 21/09/2022 13:36

It won't though, not really. The feeding frenzy will inflate prices to the extent that the benefit of the tax cut is erased.

Can people really not see that this helps no-one?

Given the feeding frenzy last time, no, people can't see it.

confusing. The market doesn't need stimulating. So weird.

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Octomore · 21/09/2022 13:59

Roomytrouser · 21/09/2022 13:43

Not if their bonuses are much bigger. The interest rate rise might actually be off putting to those who have to borrow (I have an interest only mortgage on a very historic deal which I have never paid off because until recently the rate was below that of my savings accounts - it has increased from £30/mth to £177/mth).

But the bonuses being bigger is a separate thing, independent of the stamp duty. They would get that bigger bonus regardless.

If you have e.g. £260k to spend, it doesn't actually benefit you to spend £260k on the house, compared to spending £250k on the house + £10k SDLT.

And last time, prices jumped by more than the SDLT that was being saved because people got sucked into a herd mentality, not wanting to 'miss out'. Madness.

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Nw22 · 21/09/2022 14:01

I hope it’s a permanent change rather than a short term cut. The rates abd bands need to change.

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EmmaH2022 · 21/09/2022 14:11

Nw22 · 21/09/2022 14:01

I hope it’s a permanent change rather than a short term cut. The rates abd bands need to change.

A permanent change would be worth it, yes. You shouldn't have to pay tax to move house, it's nuts.

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Octomore · 21/09/2022 14:36

You have to pay tax to buy e.g. clothes, why not a house? You also need to pay tax on the cost of extending a house, so why not the purchase?

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Nw22 · 21/09/2022 14:38

@Octomore why should you pay 20k of tax just because a 2 bed terrace now costs over 500k in some areas?

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EmmaH2022 · 21/09/2022 14:39

Octomore · 21/09/2022 14:36

You have to pay tax to buy e.g. clothes, why not a house? You also need to pay tax on the cost of extending a house, so why not the purchase?

But for buying a property, you already pay VAT on conveyancing and EA fees if you're selling. SDLT is different.

re extensions, you mean VAT to the builder? That's also VAT. I'm not objecting to VAT.

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