abolishing stamp duty,would many of us on here benifit?

House prices are based on what monthly payment the Lenders think affordable at any incme point.

If interest rates go up, so more of the monthly payment is interest, and less available for capital repayment then prices will fall, aand if interest rates fall prices will rise for the same reason.

Abolishing stamp duty will give houses a price boost because the money that would have been set aside for stamp duty will be available to add to the buyers deposit.

If lots of older people are competing for one and two bedroom flats that would otherwise be starter homes, then prices will go up until the number of people who can afford these properties equals the number of properties available, and sellers will inevitaably prefer an older buyer, who will be cash rich and not need a mortgage, over a younger buyer needing a mortgage and starining their credit to the maximum to get on the housing ladder. Those sales can fall through so easily.

They might if looking to downsize to a small apartment. It’s a fact that most people don’t downsize until their late 70s, 80s or older by which time, they may be living alone and want a small place with no garden to have to maintain.

But even if downsizers are looking mid-range, price hikes at the lower end, which will happen anyway if SDLT is abolished for one-property owner-occupiers, will ripple up through the market.

I accept that SDLT is an unpopular tax but the point of taxation is to control inflation which is exactly what will need to happen if a lot more money starts flowing into the property market. Prices will inflate wiping out the tax saving for most people other than those at the most expensive end of the market.

Badenoch’s announcement was her George Osbourne moment to try to win voters come 2029 but, as I said upthread, any change to SDLT shouldn’t be done in isolation.

Lets see what, if anything, Reeves does next month.

First time buyers already have to compete with landlords at the lower-priced end of the market. Add in millions of older people suddenly looking for smaller homes. It would cause prices to rocket making it even harder for first time buyers to compete.
I agree about first time buyers competing with landlords for property.

However, I'm not sure that older people downsizing would be looking for the same types of property as younger first-time buyers.

The only purpose of SDLT is to raise tax.

If it is were to be abolished on residential homes (excluding second homes and overseas buyers), the tax lost would come from a cut in public spending and other taxes could end up rising to control the inflation which cutting SDLT would cause.

With all the controversy about older people having so much property wealth, one of the alternatives could be to replace a buyers’ tax with a sellers’ tax. This would disadvantage downsizers but could deflate prices, which would be a good thing imo.

One estate agent has claimed that a fifth of over 55s never plan to downsize but of the four fifths who do plan to, 15% would move in the first year if SDLT was abolished and 40% would moved within two years. I don’t find that credible. but what if it were to happen?

There are around 20 million people in the UK over 55. Around 75% own their own homes so that’s 15 million. Some will be joint owers and some singles but if 55% decided to move within two years of SDLT being abolished, that could be something like five million or more home owners looking for smaller homes.

First time buyers already have to compete with landlords at the lower-priced end of the market. Add in millions of older people suddenly looking for smaller homes. It would cause prices to rocket making it even harder for first time buyers to compete.

I thought the figures had been recalculated and stamp duty 'only'raises £5 billion

I think several people on this site may be looking to downsize so could be helped by this but lets face it an opposition party can promise anything and everything it's a different matter entirely if they come to power.

If it means I have to vote conservative then definitely not.

Considering Stamp duty raises over £11 billion every year for the government I think we'll all suffer if it's abolished.

That is very useful to know *Doodledog" if he ever gets a sufficient wage to buy a property in London. Thank you for your knowledge.

icanhandthemback

The baseline should be adjusted for when you start paying Stamp Duty and letting first time buyers off for their first property to a greater threshold. I also think current rules are wrong. For example, my possible future DIL already has a share in her own home but my son is still renting as he has no chance of buying in London. However, if they buy something together, he will lose his entitlement to a reduction in stamp duty whether they are married or not. This seems unfair. Surely every first time buyer should be eligible regardless of their circumstances.

I think if they buy the house in your son's name only she can be added to the deeds later and the couple would still qualify for zero rate SDLT.

The baseline should be adjusted for when you start paying Stamp Duty and letting first time buyers off for their first property to a greater threshold. I also think current rules are wrong. For example, my possible future DIL already has a share in her own home but my son is still renting as he has no chance of buying in London. However, if they buy something together, he will lose his entitlement to a reduction in stamp duty whether they are married or not. This seems unfair. Surely every first time buyer should be eligible regardless of their circumstances.

mokryna

NotSpaghetti

As it's tapered so the super expensive homes pay more it seems to be the one tax that is actually favourable to less affluent people!

Maybe she needs more Tory donors...

What are expensive homes for someone who lives in the a part of the UK other than the SE would say a bedsit in London is expensive. There would have to be a sliding scale of recent sales to an area.

This is just England

The rates are different in Wales and Scotland.

mokryna

NotSpaghetti

As it's tapered so the super expensive homes pay more it seems to be the one tax that is actually favourable to less affluent people!

Maybe she needs more Tory donors...

What are expensive homes for someone who lives in the a part of the UK other than the SE would say a bedsit in London is expensive. There would have to be a sliding scale of recent sales to an area.

Why? What people get for their money isn't really the point (I don't think). It is the amount they are spending that is taxed. I don't think it is a particularly fair tax, but I can't see why there should be differentials.

Sarnia

As it stands, stamp duty brings in almost £12b into the Government's coffers. If the Tories win the next GE, if Kemi Badenoch becomes PM and if she remembers this promise she won't be able to give this amount of money away. Something will be taking its place.
Like Farage, very easy to stand up and make promises when you don't have to put your money where your mouth is.

well said Sarnia, they'll have to tax elsewhere to make up the shortfall or cut probably the NHS as the Torys never did want to contribute to other people's health needs as they say we should all pay for ourselves.

NotSpaghetti

As it's tapered so the super expensive homes pay more it seems to be the one tax that is actually favourable to less affluent people!

Maybe she needs more Tory donors...

What are expensive homes for someone who lives in the a part of the UK other than the SE would say a bedsit in London is expensive. There would have to be a sliding scale of recent sales to an area.

I don't think any bungalows have been built here since the 1970s.

RosieandherMaw

I don’t know.
Many people in our age group are contemplating downsizing and what about the potential benefits to our children and grandchildren who are trying to get on the ‘property ladder”
It’s not all about us.

Shouldn't we be encouraged to downsize too?

Perhaps if she'd pledged to encourage firms to build more decent properties suited to the needs of older people, that could be a vote winner.
I don't mean retirement villages, just include reasonably sized bungalows when new developments are planned.

Being mooted to really appease their rich friends who they are reslly in government serve to make teacher

I doubt it will affect me whatever happens, as I'm unlikely to move unless we move to be nearer one of the children, or one of us can't manage the stairs, and even then I'd look at a stairlift as first option. Our current house is in a very convenient position and that will matter more as we get older, so there would be no advantage in getting somewhere smaller in another part of town. Even if we did want to downsize, a move to a smaller house in the same area wouldn't release enough money to make it worthwhile when SDLT, estate agent fees, solicitors, removals, new carpets/flooring and curtains etc are taken into account. There wouldn't be a huge financial advantage, and we'd just lose on room sizes - we currently use all the rooms in the house pretty much every day, so it would be inconvenient to drop to fewer rooms, too.

I do think scrapping it would be useful for younger people, or those who need to move for work though - Stamp Duty does seem to target a small number of people whose circumstances mean they have to move more than average.

Promises, promises.......

M0nica

Samsara1

Yes it would make a difference to a decision to have that one final move or not I think. But Ms. Badenoch is leaving in a dream world if she thinks she can do that.

Most people I know have downsized regardless of stamp duty. The amount of capital they unlock and turn into usable cash, more than compensates for paaying stamp duty.

Obviously there will be exceptions, if you downsize to a more expensive area. But many cruises and holidays are paid for by downsizing.

Well you cannot have it both ways. if you can afford a more expensive house you will pay an eye-watering amount of stamp duty.

Current rates are: 0% on houses under £25,000
£125-£250,000 2%
£251-£925,000 5%
£926- £1,250,000 10%
over £1,501,000 12%

Paying proportionately more stamp duty, not just amount but by percentage as well, I am racking my brains to work out a way of banishing stamp duty without those paying the most stamp duty making the greatest saving.

You could, of course start by reversing stamp duty so that those in the smallest houses pay the highest stamp duty and those in bigger houses paying less, so that, proportionately the weakthy save less when a property is sold, but I can see the problem that would pose.

So anyone who can devise a system where the more expensive the house someone buys, the more you are penalised by paying a higher % in stamp duty, yet when stamp duty is abolished someone else can buy the same house and not save more than anyone else because no duty is payable deserves a Nobel Prize in financial chicanery, or possible the job of Chanelloe of the Exchequer.

Rachel Reeve’s recently announced a plan to reform stamp duty and property tax through an annual tax, based on the value of more properties above a certain value. I haven’t listened to the speech in full as a doubt it has the detail that anyone needs to make a judgement on this proposal, but it just feels like copycat politics?

We’ll benefit if we downsize but even if we dont, our children will if they move house. It will also keep the property market buoyant which is a good thing. Stamp duty is prohibitive when moving and could be a barrier to so many.

Samsara1

Yes it would make a difference to a decision to have that one final move or not I think. But Ms. Badenoch is leaving in a dream world if she thinks she can do that.

Most people I know have downsized regardless of stamp duty. The amount of capital they unlock and turn into usable cash, more than compensates for paaying stamp duty.

Obviously there will be exceptions, if you downsize to a more expensive area. But many cruises and holidays are paid for by downsizing.

It won’t affect Wales

What are the main rates of Land Transaction Tax in Wales?
Price ThresholdMain Rate
The portion over £225,000 up to and including £400,0006%
The portion over £400,000 up to and including £750,0007.5%
The portion over £750,000 up to and including £1,500,00010%
The portion over £1,500,00012%