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?

Yes

That seems an odd definition of wealth. If someone has a 5% deposit on a £200000 house that's £10000 of equity and they are paying mortgage and housing maintenance. If the house price drops, they could be in negative equity, they may have other debts that mean their net wealth could actually be negative. And you would consider that wealthy because their name is on the deeds?
There are wealthy people who rent and wealthy people who own and plenty of people who are poor in both also and all the in-between

I do understand your persepctive as near retirees, who have presumably reduced your work a lot and want to stop v soon. I still the chief problem is the fact that house prices are so high that lots of ? boomer/older older GenX parents feel that they have to gift large amounts of money that they have saved/from equity when they downsize as their children will never be able to buy otherwise. If this was not the case, you would probably not resent paying ££ for SD out of your equity gains as much, I imagine.

We would have to take on a bigger mortgage to get a similar sized house in the location we want to move to (nearer to college/work) Add on c.£35-40k stamp tax and this becomes unaffordable at our ages. We need to support dc through uni and boost our pensions so we can retire. So we’ll be staying put until the DC move out and we can manage with something smaller.

Increasing inheritance tax? You can't be serious? It's already 40%!

I had a shock recently to find accessible homes are not necessarily cheaper even if you are giving up 50% of your square footage. I am paying the same for a 3 bed as my current five bed and I won't be moving again. Downstairs bedroom and bathroom and that's me done.

It should be 100 you came into this world with nothing. You should leave it with nothing. Let’s see what happens when the playing field is levelled. We might actually get the most intelligent teachers, doctors, lawyers politicians rather than those that were born into more favourable circumstance.

You think teachers are ending up in their roles because of generational wealth?

Some are yes.

Teachers can earn big money. Our local academy pays £250k to its head. One previous head loved a Chanel jacket!

Our head used to turn up in a brand-new Mercedes, appreciate we don’t know her full circumstances and how she paid for the car.
But she was crap at her job and she still had one. As is often the case.
But the point is there’s a bar entry which means that we are not attracting the best and the brightest we attract who can afford four years of university education.
Remove inheritance and we’ll see who rises to the top after a generation or two

I think a lot of DC coming up now don't want £50k worth of debt @Dollysleftnip. I heard a former student saying the interest rate was huge. If there aren't any graduate jobs then people will think twice. Medicine is in crisis with few training places and £100k of debt
I grew up on a council estate but had a posh mother. I did go to Oxford and initially it opened doors. Now not so. But I'm semi retired so hoorah for that.

Your head quoted might be the same one as mine. Totally ineffective. Before her a fantastic doctor of science.
My DC grew up in feast or famine as I had to care for elderly parents. I inherited nothing. I paid for everything. One for the cockroach cafe!

I think it should be paid by the seller.

As for making the housing sale and buying process easier, let's end the current methods which are a charter for chancers or worse. Regulation of estate and letting agents, and the same process as the law in Scotland unless something better can be found.

This

it’s 40% once you’ve exceeded £1m if you’re married and own property. Below that no tax.

most people don’t pay a penny!

Yep. We were going to live in the house we currently live in for five years or so and then move. Covid completely eviscerated that idea as any house we bid on went 70k over the list price and we ended up staying put. It’s too small for us now but it’s going to take someone to die for us to be able to afford to move. The plan is to pay off the mortgage next year and hunker down.

My son bought a three bed as his first home (we didn't give him a penny) but he did live rent free for two and a half years to save (we weren't happy about that). He didn't want to buy a flat and move again. He also lived in a rented flat and hated it in the heat. No outside space for a country boy.
I think the poster saying if you've made a good profit you don't mind the SDLT. If you've bought since covid you might not have!

A lot of home owners (includes me) are in properties far too big for their needs. They keep acrued wealth in their home. This means less availability of suitable sized homes. Make it financially appealing for people to live in homes suited to their needs, if you want to have more homes on market that families can afford.

Interesting question. The simple answer would be to say yes it would help but only in the short term. It would also keep prices high IMHO. The housing market fuels so many industries, if people aren’t moving other businesses suffer as a consequence. We downsized in 2021 and took advantage of the SDLT break, but it did cause property prices to rise, race for space etc people overbidding. I know of friends struggling to sell in the SE, very tricky market atm. Property prices always rise but atm I think they went up far too quickly and there will be a correction. SDLT is just one of the issues, rising interest rates, job stability, landlords selling up, it’s a buyers market now.

The price of a house will always be what the market will bear. If you remove SD, estate agents will ramp up the asking price. That's exactly what happened in Sunak's SD holiday. We bought at that time and there was an insane frenzy and over asking price offers. You will pay just as much for houses and leave a hole in the exchequer which the Government will seek to plug in other ways.
I would be all for changing the rates to avoid cliff edges and looking at regional rates but it won't save buyers any money to remove in a functioning marketplace.

OP, do you mean abolished so that the house owning older people can keep making unjustified profits out of younger people, i.e. so they don't have to reduce their asking prices? Or are you genuinely wanting to help people, young especially, buy homes for themselves?

I suspect a lot of the call for stamp duty removal is that existing home owners can't currently sell at a price THEY want for their properties, so hope that scrapping stamp duty will mean they get what they want, i.e. affordable to the buyers.

An awful lot of the "incentives" to "help" the housing market over the past 20-30 years have been to maintain and continue to inflate the house prices, rather than to actually help the buyers. Cheaper prices (or at least not increasing so high), would help buyers a lot more than all these "help the housing market" incentives.

Totally this, the only thing it would do is fuel higher house prices.

We bought in the SE and had to pay stamp duty on our first home as it was before they increased the margins. We only bought a 2 bed as well.

Maybe changing it would be helpful but abolishing it won't really help.

The change that I disagreed with was changing the stamp duty thresholds for first time buyers. It doesn’t affect me personally. The change at the lowest end is only a couple of thousand but I remember scrabbling about as a young first time buyers raising money as it was tight.

@Badbadbunny I had been told by a local agent the reason houses weren't selling was stamp duty ( we have a new development close by where stamp duty is being paid. The agent isn't instructed there). I wanted to hear opinions if this would be a reason not to buy a 'secondhand' house or just waffle from the EA. Personally I hate paying it, I'd rather pay more income tax and I'm historically a top rate tax payer. My DS paid some as he bought in a commuter area.
I've lost money on our current home but attend to do one more move and that's it.

Yes, if you own a house you have some wealth. But you have exactly the same amount if wealth if you buy and sell an asset worth (say) £500k multiple times over a period of some years versus owning the same £500k asset for the entire period.

I'm not going to try and explain this again as it is getting dull!