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?

Ah but - that’s the thing, the next generation of people you’d expect to be buying the family houses haven’t made money from that growth.

We are having to earn that money, which makes the stamp duty situation all the more appalling!

I agree with you. Not only have younger people not gained/are not going to gain from a huge property boom but they are paying much higher levels of taxes and much higher house prices relative to income. That's one reason why I think house prices will fall though. The money just isn't available. It would also be terribly unfair of any government to exempt older people from paying SD when they are the ones who have generally enjoyed the huge gains, lower taxes and a growing economy, as opposed to the stagnation since at least the GFC. If they scrap SD, the should scrap it for everyone.

There aren't.

“Everyone viewing a home to buy already lives somewhere”

Yes, possibly in another country, in an HMO, with their parents, with a partner they are breaking up with and so on.

The size of the average household is decreasing and the population is increasing, so there is demand for ever-more houses.

To say nothing of people like my family who have several…

The argument is not that it needs help, it is that it’s a transaction tax that is making the market inefficient and stopping people moving.

To give my example again, I’d like to move, from one live family house in London to another but have to pay close to £300,000 in tax if I do. This is between two equally priced houses.

I am not getting that £300k back through any price moves, it’s not an accounting loss, it’s actually handing the state (nearly) £300,000 out of my taxed money to move house. It’s a crazy sum.

it depends what you replace it with. We can’t afford at £10-15bn hole in the tax income.
May be a good idea to replace it with a 0.5% annual property tax.
that way it’s spread over years but still proportional to wealth.
id keep second property stamp duty though

It doesn't "help everyone moving house" if an extra portion of the price they pay goes into the vendor's pocket rather than the public spending pond.

What? If I move house today to another of the same price I pay just under £300,000 in tax, plus moving costs. If stamp duty were abolished I’d not pay those hundreds of thousands in tax.

How does a saving of circa £300,000 not benefit me?

In both cases I am moving between two homes of equal value.

Again. Why do you think people who are forced to live in expensive areas somehow have more money to pay property tax? It’s been exhausting to bring up my family as a public servant in London and after 40 years I now have an expensive asset but I am just living in it. I’m not well off.
I have had less spare money than anyone in my job outside London for all my life - why should I now pay more for local services because I have been forced to live in a high price area. I am from here. I want to stay here. My family are here. The price of my house is irrelevant to my ability to pay more. That’s what income tax is for.

@MynameisnotJohn I absolutely agree. I've paid 45/50% for thirty years and I'm proud to do so as a council house kid! I just don't see why you are taxed to move. Why? It doesn't represent location or wealth. If you are spending a similar amount it's a big tax on income.
We are selling at a huge loss. No rebate for us.

Fundamentally the issue is that lower earners flat-out refuse to pay the same fraction of their income in taxes as they demand higher earners do and the main political parties have responded to this by shifting the tax burden onto higher earners and away from median and lower earners.

It’s not enough for some that workers in London pay 40%+ of every pound they earn in PAYE; people want them to pay this plus extra property taxes, transaction taxes, and of course to lose any and all benefits.

Yes. Posters are still trying to pretend that it’s a tax on property gains rather than a transaction tax.

My main home has not gained a penny in the time I’ve been here but I’m expected to pay 10% of its whole value if I want to move to a house worth the same amount a few miles across town.