Ridiculous stamp duty costs

[Ffsman]

No stealth boasting, one upmanship etc. and I know it’s first world problems.

We have a relatively expensive house, but only because the area is expensive, it looks very average and truly unremarkable. I don’t actually earn that much, the house is certainly more than 5x our join salaries.

We’d like to move, but the stamp duty amounts are horrendous, above around 900k it really goes up and above 1.5m and you’re paying 12%.

We’d like to move slightly out, around 15-30mins walk from the city centre which will give us a little more space, price will be around the same as ours give or take a couple of hundred thousand.

I’m struggling to come to terms with just how much we’ll lose in stamp duty.

The people in my position, did you just do it? Stick where you are? Etc

Also I can’t afford to keep moving, one bad neighbour who makes our lives hell and we are screwed.

We have no realistic option to extend our current house. Its city centre and the plot is good but small.

Any thoughts?

Seriously!?! Metropolitan elitist drivel.

To buy even a small house in our area we are going to be paying between £35-45k one and stamp duty. It is shit and it reduces the amount we can afford to spend on the actual house but it is what it is. We are in London and we desperately want to stay in our area and move to a house (from a small flat).

Humble brag alert!!!!!!
Leave London and buy a Castle in Scotland and stop moaning..FTLOJ 😮‍💨

Wow. Some incredibly off responses from some recent posters. Yes house price rises have meant that 'older' folks (those that bought before 2010) have large equity. But that 'gain' cannot be be realised. Normal people have become asset rich, and the level of stamp duty can wipe out years of savings, just to swap a house for one the same price. High house prices are a problem for this group as well as the first time buyers.

ONS states the average median salary for a 40-49 year old in London is £51k (take home pay is approx £40k).

This is a problem for the housing market, it is stagnating.

Between the vast amount of stamp duty and normal tax, we paid a fucking fortune of tax that year. What bothered me was feeling like the Government at the time was a complete waste of space and that it was ultimately not a useful contribution.

I’m more phlegmatic than most, I should imagine. Stamp duty tax is not going to make a material difference to my day to day life - yes, it meant we had to put the equivalent of the stamp duty on the mortgage, but we have a 10 year fix at 2%, so it’s not expensive.

when push come to shove, at least I’m in a position to buy a house that attracts a hefty stamp duty bill.

YANBU.

When ds heads off to university in a couple of years I'd like to downsize but still somewhere decent. I'd likely pay £62.5k. plus surveys, solicitors, searches, removals. At least another £7.5k

The difference in running costs between my current house and a 3 bed cottage somewhere nice would be minimal. I've just spent 13 years renovating and insulating this house, so I'd likely save no more than £2k a year.

I'd have to live 35 years after retirement to make moving worthwhile. It's just not worth the bother unless I move somewhere much smaller and lower value.

@shockeditellyou we felt exactly the same - DH got made redundant the year we last moved but walked straight into another job with a decent redundancy payment but the overall tax we paid that year with SDLT felt insane.

I just mentally rolled it all up into the cost of moving so I didn't really allocate where the SDLT was coming from - so I tried not to think too closely whether it was coming from equity, savings or additional borrowing. I was far more affronted at the obscene amount I felt we paid our estate agents compared with the amount of work they seemed to do!

That's why we are staying put. We relocated 7 years ago and bought the only house in the tiny town we moved to that we could afford and was on the market. It's not our style of house and figured we would move again locally once dd finished school.
Literally would just be paying 1000s in stamp duty for a sideways move. So we are staying put and spending that money on a new kitchen and windows

We aren’t wealthy in the traditional sense.

House prices went up a lot, and yes my partner does earn more than I do, but my wage is still ok and I work full time. My wage hasn’t increased as much as it could have over time, sadly!

Yes it is getting ridiculous especially in the South east

Agree that it’s hideous. Just about to pay a fortune in stamp duty and I try not to think about it because it really makes me cross that this is income that has already been taxed. But what can you do? If you want to move, suck it up and try not to dwell.

I have calculated the stamp duty as part of our costs of buying rather than a separate tax. So, equity less sale costs and stamp duty = deposit. It's such a huge amount of money and I'm not sure I'd spend it for a sideways move.

Very little movement in our area because of this

we’d like to downsize but this does put us off as cost will still be high

Yes even on much ‘cheaper’ properties it feels extortionate, we are currently moving house and it does make me a bit sad the sheer amount of money it’s costing to just move when you add in all the fees. The market is so slow round here and I’d be surprised if this wasn’t a factor, it definitely puts people off moving even if they’d like to.

I sympathise OP.

We would need to spend min. £300k to get a bigger house, but the stamp duty might be getting on for another £100k.

It’s a huge disincentive to move.

Reframe it as being paid out of the increase in price of your current property and it’s paid out of untaxed ‘income’.

We’ve moved recently, we’re lucky to be mortgage free and took all removal costs from our equity and that was what we could afford, we only moved a mile away, still in a rural location. We absolutely love the house and are so glad we did it.

It really irritates me when elderly people say they can’t afford to downsize because of stamp duty costs. Most will have huge amounts of equity in their homes, so should look at SD as a very small tax on their profit.

Also @Ffsman don't look at the SD bill as you having to work for 4 years to pay it off.
The bill it’s shared with your H and if you want to look at it as having to work to pay off, the bill should be split in proportion to income.

Young people can't afford a family because of housing cost while older generations are complaining about stamp duty on their million pound unearned housing equity. The youth has no future in this country.

It makes it difficult to move though especially if you don't want to upsize or just live in a different house. Then factor in estate agent fees.

It does wipe out savings or money put aside to do improvements

It's not about making money, you can't help the fact your house has increased so much and you have paid a lot over the years in mortgage costs

This is a good way to think of it.

I also agree with what @LizzieSiddal said. Sensible post.

@Papricat totally agree with your second post.

Some of us are too young to have housing equity growth through property inflation - so we are just having to earn that money.

And that is a very fair point. It is so very hard for those who have not had property equity growth.

And actually it does demonstrate very clearly for the OP that you have choices which aren’t necessarily options for many others.

It’s in the nuance though - people wanting to downsize might not ‘have to’ - unlike those moving for work, schools etc. We don’t want to make an expensive mistake. If the cost is high that slows the process down, makes us more cautious.

@MidnightPatrol yes this. We bought in the peak and saw house prices rise and flat prices stagnate. The only reason we can move at all is because we stayed in our flat for so long and salary increases over the last decade. We've barely made the money we spent getting our home liveable back.