Should stamp duty be abolished to help the housing market?

[Dorothyperky]

Nothing is selling in our area over £500k (south).

Every agent near us is seeing less sales and fewer instructions.

Also would it make a difference to you?

A far better alternative such as a Land Value tax, rather than a cobbled together modification of Council Tax retitled as a Homes Value Tax.

Yes

Stop embarrassing yourself @Pluto46.

I'm sorry to hear this. Can you encourage the potential buyer to increase a bit?

I think its you embarrassing yourself ( as you do on all these property forums with your doom mongering) you could hardly contain your glee when you posted that nauseating comment to the OP.

There are a fair few people posting as though stamp duty is a capital gains-like tax but it’s not, it’s a transaction tax which is the source of most criticisms of it.

We’ve a nice, large family home in the commuter belt in London that’s not moved in price since we bought it, so we’ve not made any profit or loss on it.

We’d like to move to another house at around the same price but doing so will cost us hundreds of thousands of pounds. We don’t really want to take hundreds of thousands of pounds out of our money, so aren’t moving. We’re sticking with the longer commute, in the slightly worse location, and hoping that the tax is dropped at some point.

Many thousands of other families are doing the same, living in the wrong place because moving for work, or schools, or any other reason is not a good enough reason to hand over 1,2 or £300,000 in tax.

There was an interesting thread last week on ' right sizing'. We are moving due to my disabilities and our next house will cost the same (5 down to 2/3 bed) as this type of property is in high demand. In our villages there are queues for bungalows and they are gone within a week.
My understanding is FTB homes are still moving with all the incentives but empty nesters are staying put. Perhaps that's where there should be an incentive?
We also allow the creation of 4+ bedrooms out of small bungalows through our planning system, yet we cease to replace that housing stock.

I'll leave you to seeth with anger by yourself Pluto.

Totally understandable that you don't want to pay £££ in SD as you don't actually need to move. At the high end of the market, London/SE, it definitely reduces mobility and probably reduces tax take too.

I agree that there needs to be more building targeted towards downsizers/smaller family homes. The higher end of the market has fallen a lot in some places but that's not necessarily the case at all for the smaller homes as there is demand from FTBs and downsizers. From what I've seen and what others have reported, there are lots of downsizers trying to sell large properties but they have selected prices that are much too high for the market.

Yes, people seem to be missing the impact on volume of transactions, assuming it just about value of the property + stamp duty.

I am in the same market. We need a bigger house. I saw one this week, would be a good short term solution but probably not a ‘forever house’. Problem is, the stamp duty would be six figures. So if I buy this house to get an extra bedroom, then want to move again… it will cost me six figures in tax each time.

So instead of ‘moving up the housing ladder’ buying multiple properties, I’ll just sit in my FTB home and consider maybe one more move maximum. Just because of the tax situation.

So a six figure stamp duty bill stops people from moving, I get that. I paid a fortune in the early 2000s to get accommodation close to London and to house my parents. I'm moving for health reasons and I'm losing money as the market has dropped in our neck of the woods. Suddenly a stair lift looks cheap!
If stamp duty has dropped by a third in April I dread to think what has happened in May!

I think a temporary stamp duty holiday would help the market yes

It helps vendors by putting more money in their pockets.

Have you no sympathy for buyers?

The market here is almost frozen. Unless you’re a FTB buying a chain free property it’s really very painful as moving up the chain people are struggling to secure their purchases or find suitable properties as hardly anything is coming onto the market

We have taken ours off (had offers) as even if we had sold there was nothing suitable for us currently and the cost of moving is just extortionate. I’m not moving for the sake of it

I have friends who have sold and are breaking the chain and moving in with family as nothing they want to buy. If that wasn’t an option they’d have pulled out and their FTB would have lost their purchase

Yes, it's a pity that we have not been building enough homes.

Are you assuming that putting a slightly greater proportion of buyers' money into sellers' pockets will increase the number of homes in the country?

No but it would give those in larger properties the incentive to down size

And of course, if we wanted to make the same sort of live but lived in another city it’d cost vastly less in tax. There must be an awful lot if families like ours who’d stomach £20-30k to be closer to work, or just who have a different set of preferences now who are not willing to give what could be a year’s after-tax salary up for a “nice to have” move.

The 12% band feels more punitive than revenue raising.

SDLT seems like something that only works in a rising market

House prices have often gone up by X% per year, where X is greater than stamp duty, putting more money into vendors' pockets.

Did that solve the housing shortage?

There’s plenty of houses on the market here for FTB.

Like I said here the problem is then finding that next property in the chain. If there’s no where for us to upsize to, I’m not going to sell and will stay put until things improve.

And yes they have been building LOADS of new houses here. Hundreds and hundreds. Theres tons of new builds available but that’s not a property we’d be interested in.

If those who want to downsize had an incentive to list or even those who want to move a few miles down the road to a similar size property etc.

I don’t think removing stamp duty is a long term fix by any means, hence I said holiday but it would help things temporarily

Welfare

Yes, pensions and health are a tremendous cost with our aging population.

Which politician will be first to say so?

It's interesting how many people on mumsnet give their adult DC a deposit from their equity when they downsize (I didn't). That money goes back into the housing market and FTB pay SDLT. You only have to watch escape to the country or location, most young couples have gifts from parents.
We live in a affluent area commutable to London and most families are planning to do this sooner rather than later.
Houses sold in the last week have all been over £1m and to young families coming for a particular school. Looking at the photos I would also say older sellers as they have traditional furniture. Perhaps they're off for a city life?

So bubbles based on low rates don"t pop when rates go up and stay up? THAT sounds like the wishful thinking! Bloomberg today talking about the FED and interest rates - "Hike, hike, hike" The world just changed for large debt holders.
You say it yourself when you point out that the higher rates are having a big effect.