Ian in his post says that:
A couple of years back I tried to get a proposal to the Government via my local Chamber of Commerce who were useless and so it didn't go anywhere. I said that it would help FTB's and the market in general, without the Government losing money, if they changed how Stamp Duty was collected/paid. If they collect Stamp Duty on Selling a property rather than buying, then FTB's won't have to find the minimum £1250 Stamp Duty as it would by paid by the seller. The Seller would be paying Stamp Duty on the Sale, but would be saving less than on the typical up-sizing Purchase. Their Seller however would be paying the Stamp Duty etc etc etc.
Then you get to the end of the chain. Usually it's either:
A. A builder (it's built into the sale price anyway)
B. A deceased persons Estate (Not around to miss it)
C. Somebody Emigrating (their income tax, vat etc is lost for good on leaving the Country so why not get something from them before they go)
D. Somebody down sizing (the ones that lose out, but they generally have the equity)
It makes sense to me, but I'm only a Mortgage Broker and what's the betting that if they went down this route they would eventually introduce Tax on Selling AND on buying?
This seems like a good case to me for the proposal, even as someone who has paid stamp duty when I bought my house. However many of you don't agree so here is a selection of your reaction to the proposals:
Terry writes: I am afraid in the scheme of things, tinkering with stamp duty is not going to make a major difference to the market. The same applies to first time buyers incentive from the government where they are only going to be available for new builds (as I understand it). All it will do is assist the builders in clearing their stocks. Surely it should apply to all first time purchasers so people can move up the ladder.
Matt wites: another reason for vendors not to sell.........crikey that could be another own goal for Brown? by disincentivising people from selling it could cut supply and keep prices higher?
Louise writes: I disagree heartily - what about people who have more than one property - they will be taxed twice - capital gains tax and stamp duty on the sale of their property! Also they have already paid stamp duty when they bought the property - this is a ridiculous idea. Why not just set a flat rate of 1% on all properties - fair and easy to understand. With regard to first time buyers - they are unaffected by a small saving of £1,700 but are being affected by the loan to value ratios meaning they have to find £20,000-30,000 as a deposit - this is what is keeping first time buyers out of the market not stamp duty.
K Hayes writes: What a brilliant idea!
A J Jones writes: Brilliant idea. Takes the tax burden away from the people who can least afford it. Fancy a job at No.11 or No.10.
J W K writes: Ken Culley stamp duty idea is flawed, he wishes the seller who at one time was also a stamp duty paying FTB to bear the additional costs of the stamp duty on disposal. This may reduce the number of sellers of higher value propery and would breach the Gov''s own treating customers fairly tax charter. This is double taxtion in my book. the numbers of first time buyers does not justify such a swing in taxation. Why not seek to exempt FTB from this tax up to ?200,000 providing you can verify their status on aplication for a mortgage.
Peter writes: am incensed to read the totally moronic comments made by Ken Culley. Who does he think pays in the end, the purchaser, because the seller will include any costs in the selling price! Also why doesn''t the Nationwide boss realise that stupid and quite unneccessery comments about falling house prices merely add to the worsening situation! It''s about time that lenders supported their customers who pay their salaries, NOT add to the newpaper hype which started the present crisis!
Martin writes: So let me get this straight - I''ve already paid £10,500 in Stamp Duty purchasing my property and now I would have to pay about the same when selling it if your plan is implemented. Are you mad?