Stamp duty legislation change …

[ohpoowhatnow]

With the new ‘leaked’ news that Rachel reeves has plans to abolish stamp duty and move towards a property value tax, would you hold off moving ?

Our house has literally just gone on the market and we haven't found a house yet …. But the removal of stamp duty would save us approximately 25k. Do you think this will be announced in the autumn budget? And if so how long would it take for the legislation to go through ?

Well said 👏🏻🙂

Agree Labour should have fought back on that somehow
I have no idea if they’ve updated their forced new proposals
but the welfare bill projection is unaffordable so this does need to be reduced

Will wait and see what they plan to do on that but I haven’t seen anything leaked for the next budget

I haven't seen anything referred to as a home value tax. I was just guessing that this was what @XVGN meant but I could be wrong.

I did interpret what several articles said about proposed changes as in favour of getting rid of the SDLT in favour of an annual tax but who knows what Labour will actually do. I have no contacts in government!

That's true. I guess I have always thought of the council tax as a bit different because, in theory, it pays for local services.
It depends on the way you look at things, I guess. Personally, I look at the best system as one that is to the overall benefit of most members of society, without prejudice based on age/sex/ethnicity, etc. What has actually happened in the last 40-50 years and worse since the GFC is a system that is very much to the benefit of the already wealthy, with the rug being pulled further away from those who are not. That's created so many problems, imo, the homelessness issue and housing being one.

The overall benefit is simply for all to pay council tax based on the size of their property
One person living in a 4bed and getting a council tax reduction isn’t an overall benefit when families need a home

Yes. The playing field needs to be reset.

Yes, I've just been using the TLA HVT for Home Value Tax - an annual tax based on home value.

The PT (Poll Tax) element would be paid by all adults equally and would reflect the fact that all adults enjoy the same local services, whether they own or rent, in the same way that every adult pays the same for a pint of milk.

But the HVT element should be the majority replacement for council tax and SDLT. and is cleanly progressive based on asset wealth.

For those concerned about an annual tax, recall that it is replacing an existing annual tax - council tax - and is just fairer and better distributed.

To my knowledge there isn’t a proposal for one tax to replace council tax and stamp duty

Council tax remains and the replacement for stamp duty would be in the order of 0.54% paid each year based on your purchase price when you buy

Council tax would still go to the local council and
replacement stamp duty would go to central Government

The stamp duty replacement tax is good for people who don’t have the lump sum to move but obviously is a lifetime payment whilst you own a property. In the long run for younger people it would be more expensive. It also would be a short term financial loss to the Government

Personally I wouldn’t have a problem with this but for younger people it is more expensive.

You may have joined the convo part way through. This HVT&PT proposal is mine - as an alternative to the flawed gov proposal.

I don't necessarily agree that there would be a short term loss to the treasury under my scheme. Remember that the HVT levied would include tax on multi-million pound property that was only previously paying a low level of council tax albeit at the highest rate. I'd probably trail the new system for 2 years whilst still operating the old, so that people have the opportunity to rightsize before it becomes due.

Ok

I missed that, I’ve made up a few myself. Wonder if Rachel is lurking 😎

and perhaps if she is then I’d say no properties should be exempt if you’re changing Stamp to a lifetime tax

That's true. I have drawn a distinction between CT and HVT but perhaps I need to think about that more.

Your suggestions are probably far better than what the government will end up doing! I can see an advantage of your 'PT' as all adults would need to take some responsibility for contributing. Something that seems very unfair in the UK and many other countries is that the burden is placed very squarely on the shoulders of higher earners, with higher incomes being hammered.

That's consistent with something I posted a week or so ago. The Government has a self inflicted back hole of approaching £60 billion, yet many of the measures they have implemented or a flying kites on at the moment, reduce the tax take in the short run in the hope of more money in the future.

Now, if you have good credit and can borrow cheaply that's not the worst plan in the world. Especially when you are creating an inflationary environment. Inflating away debt is one of the oldest tricks in the book. See Germany post war as an example of inflating away post war reparations imposed on it.

However, now that the markets assessment of the Government's competency, in absolute and relative to other G7 countries, is poor an deteriorating, and bond yields continue to rise as a result our cost of borrowing is high, and rising.

The '76 debt crisis under the Heath government was caused by a struggling economy, a weak pound and a lack of confidence in the British Governments ability to manage it's finances. It was marked by high inflation, a large balance of payments deficit and a big black hole in Government spending, combined causing a run on the pound.

Fortunately for us, the usual safe haven, the dollar, is in an even more precarious place under Trump so we are not seeing the same pressures the pound as in '76on that front! So we can be grateful for Trump for something ;)

But the underlying fundamentals are not good; however we are in good company as much of the West is in a similar place now, unlike in '76. A true example how levelling down makes everyone worse off ;)

If thought of another potential change to raise money

People who work contract but work for a year or more for the same company
They get travel and expenses deducted from their tax liability. Whilst PAYE don’t
Intjink that should be stopped. If you’re working for more than 6 months for ond company you should not be exempt from paying tax on all your income

Lots of people do this in my industry which is construction. Computer IT experts, imaging, technicians and Architects. Those on building sites too ie labourers and site managers etc
A project could go on for years and yet they still declare as self employed with all the tax benefits that go with that

Thought I’d mention that in case Rachel is lurking

Interesting chain and thoughts on here.

However to flag an unintended consequence (already) in existence on second home SDLT and that is anyone who wants to move into the country or within the UK for a new job etc, is then bandied together with the « second homeowners » for holiday / landlording purposes.

I wish there was a clear clause to exclude such people, who simply want to move for a new job and fully relocate. It is a huge penalty for those in that situation. A second home includes a previous primary residence whether it is in the U.K. or outside! Sometimes market forces mean you can’t sell your original primary residence very quickly and to lump up another 5-8% SDLT in cash as it presently is already, is frankly, galling! Yes if you’re lucky to sell previous home within 3 years, you can claw it back, but nonetheless, the cash upfront is pretty punitive.

I’m aware. We had to pay second home owner tax when we moved as our previous home sale had fallen through.
We decided to risk it and went ahead.
That risk was on us. Our choice.

If you have to move for work you have choices
rent whilst you wait for your house to sell
make sure it sells during the period that you can claim back your stamp. A quick sale isn’t a problem if marketed at the right price

We have choices and as such I think if you own a home already a high tax on buying another one is only right. We simply don’t have the housing stock to accommodate people with second homes

I do not believe their should be any exemptions

I do hear you, but I do also disagree respectfully, and especially in the case that the other property is overseas and therefore not a burden on the U.K. housing stock.

Appreciate the dilemma but I think people are tired of some getting exemptions , seen as privileges, that others don’t enjoy
At the moment it’s a case of the U.K. Government needing the money and this is a source to be tapped

( Agree a home abroad doesn't affect housing stock here )