New Home Owners And Snagging Forum
Home Owners => Buying and Selling => Topic started by: Banjo on June 03, 2011, 10:05:00 am
-
Does the cost of Stamp duty put you off moving?
The main website has some good information.
Check out how much Stamp Duty you will have to pay using the Stamp Duty calculator at Stamp Duty Calculator (http://www.brand-newhomes.co.uk/stamp-duty-calculator.htm)
With all the other costs, estate agents fees, conveyancing fees etc this really is the last straw.
Check out the full cost of moving: The cost of moving (http://www.brand-newhomes.co.uk/the_cost_of_moving_to_a_brand_new_home.htm)
I think the threshold will stay at the current levels for years and as property prices increase over time, nearly all transactions will incur the highest rates of stamp duty.
-
Anyone buying a house just above or near the stamp duty tax thresholds must be mad.
For example a £505,000 house will incur Stamp duty of £20,200. A £495,000 will have £14,850 Stamp Duty Tax - £5,350 less tax for a reduction in price of just £10,000.
-
Of course the idea is to buy a property at the first time buyer stamp duty relief threshold of £250,000, and then add value to it until you can get past the dead zone of up until around £270,000-£280,000.
-
It can take a long time for the price to rise from £250,000 to say £295,000 the next price barrier.
Unless you buy somewhere that needs a lot of renovation it could take ages in this market!
A first time buyer would need to pay LESS than £250,000 to qualify for a zero rate which is only valid until 25th March 2012.
No doubt there will be a spike in First Time Buyer activity just before then!
-
I absolutely agree Philofacts, it would have to be in need of some fairly good rennovation. It's such a shame that this silly system exists. In your opinion, what are the best things to look out for home that would lend itself to getting such a large increase in value out of it? Should one look for loft space, enough room for a conservatory?
-
If you increase the price the amount of stamp duty also increases.
Only carry out improvements that will give YOU a benefit - dont just do it for a paper "profit"
-
Absolutely. I personally hate conservatories! Although I like them when it's raining, but in general I feel like im in a greenhouse!
-
Conservatories also take away some of a value asset - your garden.
-
I would never buy a property over the 1% rate for Stamp Duty.
I would want a reduction in the price to cover the additional Stamp Duty I would pay.
-
Some buyers and sellers actually personally agree a secondary transaction for something spurious like the furnishings in the home, thus allowing the seller to sell for less but recoop some of the costs the buyer would have paid in stamp duty.
-
I had wondered whether you could do this for say a separate garage or the grounds. But I think it needs to be a separate transaction as the form says:
"This is not part of a transaction or series of transactions relating to the same property" and no doubt the legal fees would also be doubled!
They will always get you.
If you can trust the purchaser you could pay part with cash or home exchange - setting prices to reduce the Stamp duty payable.
Self build is a good way of not paying any Stamp Duty, you only buy the land and that should be below the 1% threshold.
-
I believe the only way you could add enough value to buy at £250,000 and sell for £300,000 a few years down the line (the area where people might start considering paying stamp duty again) would be to add a loft conversion and gain another bedroom.
I'd be interested to hear other people's opinions.
-
I would agree that £50,000 is the least amount of value added to make the next rate of stamp duty charged worthwhile.
Certainly adding extra rooms would add value.