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  • Tax

    Stamp duty transferring from buyer to seller?

    A mention the other day concerning the stamp duty implied having the seller paying rather than the buyer.

    It has a a certain appeal, certainly increase sales and it makes it easier for buyer and for the seller they are in funds with the sale.

    Could be controversial!

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    There are arguments for and against it.

    The biggest argument against it is for those who wish to downsize (say children have moved out). They have lots of empty space that is desirable for new families and looking for a smaller property, a cottage perhaps.
    The person who is downsizing is then penalised for doing so, having to pay large SDLT to move into a smaller less valuable home. That in itself does not make sense.
    Then add in the scenario that they already paid the large SDLT when buying the home and having to pay it again.

    So whilst it has its upsides, it has some certain gotchas to be worked out.

    The worst is that it could put people in financial hardship. You dont have money to pay SDLT? Then you are stuck in your current unaffordable property digging a hole until you can.
    ​Not too dissimilar to negative equity.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________

    40 odd yrs ago SDLT on a Home Counties semi was around 2 weeks gross average wage - whereas today it is nearer 28 weeks gross average wage.

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    Stamp duty is a ridiculous tax acting massively distorting the entire market and a very real cost to many families.

    My house 3 years ago cost me nearly 6 figures in stamp duty and now I want to move again for personal reasons. My house certainly hasn't increased in value so this will just be a massive amount of tax that the government has had from me just for having a home for my family.  The stamp duty was 9 years of my wife's income as a teaching assistant as although she works full time the same govt cleverly makes it so she is 30 mins a day under full time and therefore only part time for pay.  Mick take.

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    In your case with a sale at around £1.5 million it may be worth waiting to see what Boris has in mind on SD revisions.

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    Your stamp duty bill was more than the 6 bed house that I bought!!
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    Stamp Duty is nothing but theft. As FTB in London utilising Help to Buy our stamp duty bill is nearly as much as our deposit. And yet the Gov is contributing 40% of the cost for us to buy somewhere. It's farcical.

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    Consolation is that after say the 25 yrs of mortgage repayments - not only will you have paid a similar amount as you would to rent same property - but you will then be outright owner of the property.

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    Oh absolutely, it's part of the reason why we decided against investing in BTL as our first port of call. The thing about SDLT though (particularly in London) is that it effectively reduces our deposit by 40-50%, meaning we have to borrow more and thus pay more interest in the longer term.


    Racketeering if you ask me! All for the privilege of getting rid of all our savings hahaha!

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    It should have been abolished 100 years ago. But it's easy money for the government.


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