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?

It shouldn't be abolished to help the housing market. It should be abolished to make moving house easier. It is effectively a tax on mobility.

No x

I think that new buy to let sales should be banned to help the housing market.

I see that.
I remember being told at hmrc (I worked there) is was a tax on future profits.

It’s literally not that, so whoever told you that at HMRC was making things up.

This.
and stop all the relentless new builds to get control of what’s going on.

@WheretheFishesareFrightening I was 19!

I thought that was CGT

I do not think that buy to let sales should be banned, it’s impossible to find a decent rental as it is.
And yes, I think stamp duty should be reduced or removed.

Yes it should be abolished as it’s demonstrably reducing liquidity in the housing market as so many people are put off moving because of it.

It has also reached fairly obscene levels if you live in some areas - I’m not moving because I can’t bring myself to pay what is probably a six figure tax bill

Should be abolished .

@MidnightPatrol a few friends feel the same. London, Surrey etc. The cost is high as is conveyancing and removal services.
I'm looking at £50k to move and I'm downsizing.

At the very least, the thresholds should be reviewed. It's impossible to even get a studio where we live for less than £250k and you have to a fair bit over £500k to get a two bed terrace.

I do think second homes should be taxed though.

What do you mean by ‘help the housing market’?

Yes, it’s completely stupid.

In London and the South east it basically breaks the housing ladder. Theres no point buying a flat or starter home even if you can afford the mortgage because if you want to move in a few years time you’re going to need 15k+ in cash

In England if they fixed the house buying system and cut stamp duty by at least half the government would get more than its money back plus affordability and productivity will increase

its A tax that has never made sense to me

I learned something watching the telly the other night. It was actually about the American revolution with Lucy Worsley but she mentioned about how one of the taxes that was involved in kicking things off was 'stamp duty' which at the time was a duty on all sorts of literally stamped paper/parchment and then spread to other physical products in the colonies. It already existed but I think George spread it on to other things including property.

So now its a land tax.

Our house was too cheap to pay it and prior to that my property was too cheap I think so I've never paid any.

I’d definitely move house if there was no stamp duty. I think a lot of people are probably in the same boat.

It’s not just stamp duty holding the market back. The cost of debt now is £££ which makes a big difference.

I would prefer they scrap stamp duty and replace with an annual tax.

What do you mean by 'help the housing market'?
The main problem that is leading to the more expensive properties not selling currently is that they are being priced too high relative to what the market can afford and that the agents and sellers still haven't realised this. As prices fall, SDLT falls too. The economy is deteriorating and is highly likely to worsen, the job market is therefore worsening, the cost of credit has risen and we may well see a credit crunch at some point, the cost of essentials has risen and is clearly going to rise more. Yes agents and sellers think people can afford a 2022 price or even more.

Having said all that, SDLT is a foolish tax. It reduces mobility, as someone else says. I would rather see a general overhaul of the tax system, not just the usual tinkering around the edges and a LVT system gradually introduced.

Last time we paused stamp duty it may have fuelled some sales but fundamentally nobody won because whatever savings they made on stamp duty ended up going to the banks instead
I don’t remember the banks building any schools or hospital with the increased profits

The reforms Osborne made to stamp duty made it far more expensive for many in the south east to move as it caused taxes to rocket for anyone with property over about £925k. It doesn’t buy you anywhere near a mansion down south, I promise!

It’s just one piece of the puzzle.

Nearly anyone under 40 has been royally screwed on wages and housing costs. (I’m not a millennial but I feel for this age group). Wages have been stagnant for decades - possibly since Gordon Brown incentivised employers to pay crap as the state tops up a significant proportion of the working age population’s wages through recycling their own money back to them as tax credits.

Central banks in the West meanwhile have kept interest rates too low for too long, inflating ‘asset prices’ such as property.

That has meant that anyone after Gen X has paid too much of their after tax income on housing costs, stopping them from saving enough to go up the property ladder. Or from investing in other parts of the economy.

Now that some baby boomers are ready to downsize, they’re struggling to find a ready pool of buyers because younger folk are too broke and they don’t have the equity to upsize or even get on the ladder.

The bad news for baby boomers is that there is no wealthy pool of buyers waiting to lap up their assets.

Gen X - many of whom are too young to have benefited from final salary pensions but too old to have maximized auto enrolment - is already looking with trepidation at pissnpoor pension savings, rising uni costs for offspring, stamp duty and IHT and have missed the boat in many cases to trade up.

There is little electoral appetite for immigration - even to attract the wealthiest migrants - so I can’t see a way that house prices will continue rising when the wealthiest and numerically largest generation is passing through.

In my experience (live in another country) all that happens when stamp duty on homes is tinkered with is that the agents tell sellers that a cost to buyers has been removed and so their house should be marketed at a higher rate to take this into account. Or don't even tell sellers this but calculate the suggested price taking this into account.

It makes no difference.

The government has to get money to pay for all the stuff you want. No one will vote for a government which puts up income tax. So we have all these other taxes to raise money instead.

Bitch all you like, and my god everyone does, all the time, but the money to pay for everything has to come from somewhere. We don’t have enough anyway and with sodding Iran and everything, it’s only going to get worse.

Cutting a source of government income right now would be an act of wilful self-harm.

Increasing the supply of housing is the only way to meaningfully moderate the price inflation.