November 2017 Budget Tips: Stamp Duty
If you haven’t moved home in a while, you may have forgotten the extra financial blow that is Stamp Duty. As the 21st century has caught up with the ridiculous fees Estate Agents charge, there is still that Government Tax to make a big dent in your finances. Did you know the Government made £15.4 million pounds in Stamp Duty tax last year alone. Many experts now believe it’s seriously hampering people from moving homes. In particular, it’s hurting people in lower cost houses from moving up the ladder. Read on for our budget tips on Stamp Duty.
Isn’t Stamp Duty a rich persons problem?
Well, yes and no, it’s definitely the case that richer people in large homes pay much more Stamp Duty than people in low cost homes. But, like it or not, those people are what drive the housing market. When the rich person moves from one £2m house to a £3m house, someone else who just sold their £1m house can move in. When that £1m is available, someone in a £750,000 house can move up. It sounds odd but that one rich person deciding to stay put can prevent everyone from moving up the ladder and we can’t change things from the bottom rung!
What else is an issue?
There’s a lot of people that also think the elderly are staying in their family homes because they can’t afford the tax to move to a smaller home. This ties up family homes desperately needed in our towns, cities and villages.
What might change?
- They might reduce the amount of tax pensioners need to pay when moving to a smaller home, this would free up thousands of family sized homes across the country. Some experts believe that this might even make the government more money by kick starting a house selling boom.
- Reduce the level of tax on the most expensive properties. We know this feels wrong but as described before, if the end benefit is to free up houses and allow more people to move up the ladder then, maybe it’s a good thing.
- Reduce all Stamp Duty. Again, a lot of experts agree that this will actually make the government more money as more people can afford to move home and the whole housing market gets a kick start. It’s unlikely though.
- Raise the threshold for paying lower rates of tax. This could happen although it’s not a high likelihood, the government stands to lose too much in the short term to consider a longer term gain as more people move homes and climb the ladder.
Whatever the change is, it makes for some interesting ideas on how things could be improved. The raised low/zero tax threshold is our favourite but it’s unlikely to be the answer. It’s a shame as this is the change that would have the greatest immediate effect on most of us.
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