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?

Exactly. It's not the SDLT in isolation that is the problem. That change was made 12 years ago.

House prices are far too high relative to incomes. I've made the same point on another thread recently that, even ignoring the current, major economic problems, set to worsen, the demographics put a downward pressure on house prices. There is no chance that younger generations, as a whole, can buy all the older generations housing at the prices they want currently. Lots of people don't want to hear it but it is true.

Loads of big empty houses sat here not selling or taking ages to go. You can tell they are either probate or someone has moved to a care home and their kids want huge amounts for them. Often haven’t been updated for decades. I’m not paying £750k for a house with a kitchen from the 1980s

They’d just replace it with something in order to double tax everyone who’s already paid SD.

I said this on another thread recently and was told I’m wrong, but this is also what I’m seeing.

Or they could reduce the amount people can borrow. And stop buy to let borrowing, restrict 2nd homes.

If less money is put into that segment, prices will come down.

Whether or not SD is sensible it exists and brings significant revenue. what services should be cut or which other tax increased?

It should be abolished and replaced with an increase in council tax on the higher bands . Plus a revaluation of values to bring council tax back into the real world

People hate paying Council tax for some strange reason, they’ve got a real aversion to covering the cost of the fire brigade and the police service

I’m generally not in favour of cutting taxes, particularly as public services are so badly funded at the moment. However it is the only thing stopping us moving and keeping us stuck in a location that no longer works for any of us (adult kids).

What would you replace the £20 billion in receipts with?

Same in our area. Large houses not selling. We would definitely buy a £750k house (and up to £1million) with a 1980s kitchen (I might even keep it) but stamp duty is definitely holding us back. It would be £50k gone in an instant. I also think the memory of the stamp duty holiday post-covid doesn't help. We are always thinking they might bring in another so we wait. But we've waited a while and now the fancy of moving has waned. Plan is to stay and chuck all the furniture out like Squash and a Squeeze

As others have said, it’s property prices becoming increasingly unaffordable & the cost of living increases which are the main issue.

I would love to move but prices locally have increased so much, especially post-covid - that it’s just not realistic.

I’m now beginning to see properties, which would have flown off the shelf in recent years, sit on the market for a bit & often go to a fixed price (not a closing date) - am in Scotland- in a property hot-spot.

I think the housing market is going through a much-needed correction.

No no no to anything that prevents this slow deflation of the bubble. The various stamp duty holidays just maintained the bubble and al for the benefit of people who already own property. I don’t like the tax but removing it will have negative consequences overall.

It’s not logical to continue to think a house is worth x when it doesn’t sell for x. As forced sellers slowly complete their sales that x will inch downwards and wages will inch upwards until affordability is better for the people who need to buy a home. Young people need this.

People have an aversion to paying more for those things based on where they live. CT is not a logical tax.

Stamp duty is the main thing preventing my mother and I both selling up and joining forces. A multi generational home would free up one family sized home, and likely reduce burden on the state with elderly care down the line. There must be many others in the same position.

When property values were shooting up very quickly, the cost of the stamp duty may have seemed more absorbable as it was part of ‘unearned’ value inflation.

When youre looking at earned income to pay it, it becomes insane. You don’t want to be moving any more than absolutely necessary.

Just to say the receipts for SDLT are £2.2B not twenty.

But what would you replace it with? Stamp duty is paid to HMRC so increasing council tax won’t replace that money, they pay for different things. As far as I’m concerned it’s just another tax, there are many things I could afford to do if it wasn’t taxed but I also know the state of public services won’t improve with less money.

The market needs a correction, better a slow, manageable one than a crash somewhere down the line and stamp duty is part of what’s facilitating that reduction. People need to price their property for the market they’re in, not the one they wish they were in which means selling at a price people can afford. Removing stamp duty would mean people paying the same amount because prices would rebound except that increase would end up with the vendor rather than contributing to wider society. I’m in Scotland where the equivalent of stamp duty is much, much higher but unless the revenue is replaced in some way abolishing stamp duty makes no sense.

Loads of big empty houses sat here not selling or taking ages to go. You can tell they are either probate or someone has moved to a care home and their kids want huge amounts for them. Often haven’t been updated for decades. I’m not paying £750k for a house with a kitchen from the 1980s

A lot of people haven’t been able to build up the equity in recent years which previously drove a lot of the market.

And people really aren’t factoring in the cost of debt.

a 400k mortgage at 2% means paying 100k interest over 25 yrs. At 5% it’s 300k interest. Add in people paying more for utilities, food etc and higher taxes. Renovations, even decorating is £££.

Nothing is selling anywher. Ditching the stamp duty might get things moving a bit it would be short term and won't necessarily help the top of the market. We are late 40's, got on the housing ladder 25 yrs ago, made some profits through selling previous houses on a rising market. Both earn decent salaries for outside London. Even we have struggled to buy our next home. We have brought an expensive house with about 50% LTV but actually this commits us to huge mortgage repayments for 30 yrs. We think we will be able to pay it off faster once the kids are through Uni and potentially downsize at retirement age but who knows. But if we are struggling then anyone younger than us won't have a hope. House prices vs interest rates vs stagnant wages means nothing is moving.

£16B actually. I read it wrong.

Definitely what I have been seeing for several years.
It makes total sense given the rise in the cost of work.

Agreed. Increasing the supply of housing is definitely not the only way moderate price inflation. Downturns have been caused by economic recessions and reduced access to credit.

It should be abolished mainly because we are not in wae with France anymore...

I remember something in the mid 90's. Some downturn caused a drop in house prices and there was big complaints about negative equity ? Can't remember the details sorry.

But I think if guv policy is to have house prices go up to please their voters, then at some point that policy has to stop.