New stamp duty rules

83 posts
Annabel (admin)
Site Admin
Posts: 3252
Joined: May 2008
Options:
Share this post on:

New stamp duty rules

Postby Annabel (admin) » Wed Dec 03, 2014 1:41 pm

From the budget...

http://www.bbc.co.uk/news/live/business-30249297

Stamp duty has changed and with the price of houses in Nappy Valley being pretty high I think this will affect many NVNers.

Purchase price of property Rate of SDLT (percentage of the total purchase price)

£0 - £125,000 0%

£125,001 - £250,000 2%

£250,001 - £925,000 5%

£925,001 - £1.5 million 10%

Over £1.5M 12%

My understanding is that this is marginal so for a 1.5 million pound house... I work it out to be 93.75k in stamp duty, as in it's not on the whole amount paid.
Post Reply
Goldhawk
Posts: 1026
Joined: Jul 2010
Options:
Share this post on:

Re: New stamp duty rules

Postby Goldhawk » Wed Dec 03, 2014 2:39 pm

Yes the new rates are banded instead of the old system which was a % of the total

So under the old system the Stamp duty on a £1.5M house was £75K

On a £2M house you now pay £153,750 instead of £100,000 before = OUCH!!
Post Reply
juliantenniscoach
Posts: 1894
Joined: Oct 2009
Options:
Share this post on:

Re: New stamp duty rules

Postby juliantenniscoach » Wed Dec 03, 2014 2:44 pm

And Ed Balls is still pushing the 'mansion' tax which would undoubtably affect many of us too. Watch out for more basements and lofts coming your way! ;)
Post Reply
Couloir
Posts: 4
Joined: Nov 2014
Options:
Share this post on:

Re: New stamp duty rules

Postby Couloir » Wed Dec 03, 2014 3:01 pm

just as well we all love living in the area...cos we're never moving!
Post Reply
MummyWalker
Posts: 47
Joined: Jun 2012
Options:
Share this post on:

Re: New stamp duty rules

Postby MummyWalker » Wed Dec 03, 2014 3:07 pm

Numbers geek that I am, I've just tried working out the break even point and I think its £1.125m i.e. for houses worth less than that, you're better off under the new system and for houses worth more, you'll now pay more in stamp duty
Post Reply
cuqui03
Posts: 115
Joined: Dec 2014
Options:
Share this post on:

Re: New stamp duty rules

Postby cuqui03 » Wed Dec 03, 2014 3:39 pm

We exchanged literally early this week and expect the keys on Friday. We have literally just saved £5k so pretty happy about the timing!
Post Reply
juliantenniscoach
Posts: 1894
Joined: Oct 2009
Options:
Share this post on:

Re: New stamp duty rules

Postby juliantenniscoach » Wed Dec 03, 2014 8:58 pm

Ed Balls - Gordon Brown's No 2, Chief adviser. Brown............withholding tax and selling gold at all time low. :shock:

Theoretically, depending on the level of the 'mansion' tax we could be penalised for simply living too close to central London. The latest figures suggest that the population of Greater London will rise 37% over the next decade. Now clearly there isn't going to be a 37% increase in living space so that will push the prices of houses up over the median rate for the country.

Although we may be asset rich, it's an asset we can't touch because we live in it. If the tax demand is too high on families who are already cash strapped, then the tax will force you to move. Now what type of tax forces you to uproot your family from friends, schools etc simply because you made a good choice when buying your house? Ironic that Labour would create a tax that actually excludes many social groups to the benefit of the cash rich.
Post Reply
Bodders1
Posts: 122
Joined: Jul 2014
Options:
Share this post on:

Re: New stamp duty rules

Postby Bodders1 » Wed Dec 03, 2014 10:47 pm

Anyone buying a house worth more than £937,500 will be worse off so that could be a significant number of NVN'ers
For a £1.5m house by about £18k
For a £2.0m house by about £18k
For a £3.0m house by about £63k
I see Foxtons share price has dropped!!
Post Reply
MummyWalker
Posts: 47
Joined: Jun 2012
Options:
Share this post on:

Re: New stamp duty rules

Postby MummyWalker » Thu Dec 04, 2014 1:01 am

Just been trying to work out why Bodders1 and I were drawing different conclusions on the point at which people are better / worse off! I realise I'd only looked at purchases of £1m plus. Looks like we're both right though - below £937,500 you'd be better off with the new system, then up until £1m you'd be worse off, then from £1m-£1.125m you'd be better off again, and then above £1.125m you'd be worse off
Post Reply
gruffalo's dad
Posts: 79
Joined: Jan 2014
Options:
Share this post on:

Re: New stamp duty rules

Postby gruffalo's dad » Thu Dec 04, 2014 4:20 am

MummyWalker is correct that a buyer will pay slightly more stamp duty on purchases between £937,500 and £1m, but the increase there is extremely marginal. It is over £1.15m that there is a hit, and especially between £1.5m and £2m.

I saw a table that showed the impact of the change on different parts of the U.K. The only place the stamp duty take goes up is London - by over £400m per annum. The place the stamp duty take goes down the most is the South-East (outside of London) - by about £300m. That's a reflection of the fact that the reduction in stamp duty under the new rules compared to the old is greatest for properties selling for £250k to £400k and £500k to £750k. There are relatively few properties in the north of England or Wales at these prices, but plenty in the South-East.
Post Reply
firsttimerSW11
Posts: 507
Joined: Apr 2013
Options:
Share this post on:

Re: New stamp duty rules

Postby firsttimerSW11 » Thu Dec 04, 2014 10:27 am

It always amuses me when the Labour Party bandy around mansion tax figures, usually accompanied by a picture of a, well, mansion. Hardly a skinny former workers terrace with what can only be described as a back yard and no off street parking. I love living in a mansion!!!
Post Reply
london_maman
Posts: 34
Joined: Oct 2014
Options:
Share this post on:

Re: New stamp duty rules

Postby london_maman » Thu Dec 04, 2014 10:35 am

juliantenniscoach wrote:Ed Balls - Gordon Brown's No 2, Chief adviser. Brown............withholding tax and selling gold at all time low. :shock:

Theoretically, depending on the level of the 'mansion' tax we could be penalised for simply living too close to central London. The latest figures suggest that the population of Greater London will rise 37% over the next decade. Now clearly there isn't going to be a 37% increase in living space so that will push the prices of houses up over the median rate for the country.

Although we may be asset rich, it's an asset we can't touch because we live in it. If the tax demand is too high on families who are already cash strapped, then the tax will force you to move. Now what type of tax forces you to uproot your family from friends, schools etc simply because you made a good choice when buying your house? Ironic that Labour would create a tax that actually excludes many social groups to the benefit of the cash rich.
Honestly? I don't think anybody will feel sorry for you. First world problem! If you have a house worth more than 1M you are rich. And I don't think any of you will have to "uproot your family from friends and schools". Let's take a step back and think about people who can't afford presents for their children for Christmas, and they are lots of them in this country. People who buy frozen pizzas because it's cheaper than fresh meat at the butcher. Reading some of these comments is quite shocking.
Post Reply
btcmum
Posts: 74
Joined: Apr 2012
Options:
Share this post on:

Re: New stamp duty rules

Postby btcmum » Thu Dec 04, 2014 12:47 pm

Honestly? I don't think anybody will feel sorry for you….. Reading some of these comments is quite shocking.[/quote]

london_maman… really??
Post Reply
jg75
Posts: 125
Joined: Nov 2013
Options:
Share this post on:

Re: New stamp duty rules

Postby jg75 » Thu Dec 04, 2014 1:03 pm

I am not sure we can really call this a mansion tax though. You only pay SDLT if you buy a new home. So if you stay put then you are fine. Also, if you buy a £1m property under the new rules, my understanding is that you'd only pay an extra £4k (which let's face it, you can afford if your property is worth £1m, however you came about it - it's only a small add-on to any mortgage). I understood that the new rules will really kick in for a £2m property. For me, that's an expensive property, even in expensive areas like SW London.

A mansion tax is a different matter and I understand the arguments against, but I do think you need some way of taxing fairly and I think this tax is fairer than some.
Post Reply
TFP
Posts: 49
Joined: Jan 2013
Options:
Share this post on:

Re: New stamp duty rules

Postby TFP » Thu Dec 04, 2014 1:05 pm

Yeah.

Basically you're:

(a) paying very fractionally more tax if buying above the new '5% marginal' band @ £925k but below the old '4% uniform' band @ £1m;
(b) paying a litte less between £1m and £1.1m;
(c) thereafter paying more, rising to about £55k more @ £2m;
(d) at £2.1m paying only about £20k more, rising to, well, e.g. about £65k more at £3m.

I always preferred the idea of a mansion tax to super-high stamp duty.

Osbon saying that the former is unacceptable but the latter acceptable is, to me, saying:

On why mansion tax is unfair - "some people with fairly normal jobs or who maybe are retired have earned hundreds of thousands, maybe millions, by virtue of owning a house in a particular area... of course we have a responsibility to let them keep every last penny of those gains, anything else would be unfair"

On why really high stamp duty is OK - "some people are putting together loads of money they've saved from having a highly paid job + several hundred grand more that they've borrowed from a bank, obviously we need to tax the sh-t out of such reprehensible behaviour".

this smacks to me of pandering to the grey vote, just for a change.

imagine that people in expensive houses move once every 10 years on average. levying [crude average] 10% stamp duty on just those people who move house will raise exactly the same money as charging everyone 1% p.a. [as per, crudely, the current labour proposals] regardless of whether they move or not. to my mind the latter is much fairer. is moving something house that needs to be clamped down on, penalised?
Post Reply