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Stamp it out

I’ve just read that in the calendar month of October,  people buying homes paid the Exchequer a total of £852,000,000 in Stamp Duty. Annualised, that works out at over £10 billion a year; total revenue for the current fiscal year won’t hit that but a figure of £8.5 billion is expected. I don’t know about you but that’s a staggering sum to me, money seized by the Treasury from  British families for the privilege of putting a roof over their heads.

What is Stamp Duty? Actually the full title is Stamp Duty Land Tax, but the Government tend to leave out the last two words, probably for fear of stirring up public protest. It has  a slab structure, with rates applied rigidly to price bands. For example if you buy a house for £250,000, you will have to give nice Mr Osborne £2500, 1% of the price. But if you pay £250,001, the greedy bastard will grab a few pence over £7500, that being 3%. Property transactions below £125,000 are exempt, but house buyers in that bracket are still required to report the transaction to HMRC within four weeks. Failure to comply may lead to a fine and will prevent the sale being recorded in the land register.

From 2015, there will be changes to the regime in Scotland. The threshold will rise to £180,000, above the current average Scottish house price, and the slab principle will be abolished. That’s fine as far as it goes, but the principle will remain, that people must pay the government for their legitimate aspirations. To me that’s plain wrong, so why the hell do we put up with it?

 

Categories: Politics
  1. Joy
    November 22, 2013 at 8:23 pm

    Don’t know what the current equivalent is in Spain, but it was considerably more than the UK when we purchased over there. That also led to ‘black money’ being exchanged.

  2. November 23, 2013 at 10:22 am

    5%, as I recall, the gain being based on the declared value on the new escritura against the old. Hence the black money; the sale is completed by the Notario and a cheque for the declared value is handed over, then the Notario will leave the room and the black money, always cash, completes the transaction. It’s the norm in Spain.

    But there is a catch, although one that is unlikely to be occurring these days. The declared value cannot be less than the amount of any mortgage on the property. In the good old carefree days when the crisis was being fuelled, a bank might offer a mortgage of 105%. In those circumstances the vendor would find himself paying tax on money he had never received.

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