Stamp Duty

[drplokta]

Apparently, the Tories have decided to raise the stamp duty threshold to £250,000 for first-time buyers only. Can anyone come up with a workable definition of a first-time buyer for purposes of this policy (remember that the taxman can't ask to see documents more than seven years old)?

Comments

[bohemiancoast.livejournal.com]

Well, even if they could work out who the first time buyers were, which they can't, this policy is still complete pants. Ooh, inflationary subsidies in volatile markets! So, say you now save £4,000 stamp duty; ooh lookie, the house you were interested in has gone up in price by £4,000 overnight, because everyone who fancies it can now afford an extra £4,000.

Oooh, cliff edges! Suddenly huge numbers of houses cost £249,999.

Ooh exciting family destabilisation, because *nobody* buys a house jointly ever again in a world with this policy. Perhaps not even in a world where this policy has been suggested as a possibility.

And let's not forget that we still aren't doing anything about the fact that £250,000 will buy you a damp-ridden two-bed maisonette in London, or a small mansion in Bootle.

No. Total carp.

A better, but still shit, policy, would be to up the value of the children's bonds but lock them down to houses only.

[drplokta]

You can't save £4,000 in stamp duty because the most you can currently pay on properties under £250,000 is £2,499.99. There's already a big cliff-edge encouraging houses to be priced under £250,000 (£7,500 payable on a £250,000 house; £2,499.99 payable on a £249,999 house), so it probably wouldn't make things much worse.

The inflationary subsidy is not quite as bad as you make out, because second-time buyers and buy-to-let investors don't get the subsidy, so this would improve the relative position of first-time buyers against other groups.

It's certainly true that this will stop two people from buying together and using up both first-time buyer discounts, even if they're married (unless they exempt a couple up to £500,000, which might get some uptake in London).

[fishlifter.livejournal.com]

buy-to-let investors don't get the subsidy

M's suggestion over breakfast was that if this were coupled with an increase in stamp duty for anyone buying a second home or buy-to-let, it might help with house price inflation. Economists may be able to tell me whether that would work, but sadly I think everyone will first recognise the politics of why it won't be happening.

[del-c.livejournal.com]

say you now save £4,000 stamp duty; ooh lookie, the house you were interested in has gone up in price by £4,000 overnight, because everyone who fancies it can now afford an extra £4,000.

More generally, that's the reason I'm a Londoner who is against London Weighting. All it does is drive up the price of groceries.