Stamp Duty

I reproduce below my case to abolish the slab approach to Stamp duty and to offer us all a cut in the amount of this transaction tax. I first wrote this in August 2013, and renewed my proposal in a debate in the Commons this year.I would like to have seen a more generous reform, but the one the Chancellor has proposed does mean some reductions in Stamp Duty for all homes under £940,000 in value, which is good news.The interesting question will be what impact the new 12% rate has on high priced homes, especially in central London where most of them are concentrated. As the Chancellor needs the continuing revenue from these dear properties he will need to watch carefully what impact this tax has on transactions volume.

Stamp duty – make it a progressive tax

By johnredwood | Published: August 26, 2013

I do not like Stamp Duty. Houses are dear enough, without imposing an extra tax on people trying to buy a home.

I am also a realist. This Coalition government, and any likely successor, will need revenue from taxing property transactions. They are not about to abolish the tax and give up the money. We need to find a fairer way of charging the tax, and set rates which are more affordable so there can be more transactions. That way homes can be cheaper, and the taxman can still raise substantial sums of money in a more buoyant economy.

One of the worst features of the current Stamp Duty is the cliff edge approach to the rising tax rates. Buy a home for £125,000 and you pay no tax. But a home for £125,001 and you pay £1250 of tax.

The increases in tax at threshold points become very high as the price of the property rises. Pay £1 over £250,000 and your Stamp Duty bill shoots up from £2,500 to £7,500, a 200% increase, or an extra £5,000 on your purchase. Pay £1 over £500,000 and your Stamp Duty bill surges from £15,000 to £20,000, another £5,000 increase, though a smaller percentage.

Pay £1 over £1million and your Stamp Duty bill is a hefty £10,000 more, rising from £40,000 to £50,000. That’s £50,000 tax to buy a one bed flat in central London, for example. Be in the fortunate enough position to be able to buy a 2 or 3 bed flat in the best parts of London and you would have to pay £100,000 of Stamp Duty at £2m. Pay £1 more and the tax bill climbs to a giddy £140,000, a £40,000 increase. Just the increase in the Stamp duty is considerably higher than average annual earnings.

The £1250 tax rise at £125,000 and the £5,000 tax rise at £250,000 are particularly onerous on many people trying to buy a family home in many parts of the country. It can be the last straw, that stops people buying the home they need and want.

The cliff edge thresholds of course distort the market. Homes for sale cluster just below the threshold points. There are large tracts of pricing territory but sparsely populated with homes for sale. £250,000-£260,000, £500,000 to £525,000, £1m to £1.1 million are not popular. The tax intervention creates a lumpy and jumpy market, where there are gaps in price availability, with vendors either holding down the price or leapfrogging it upwards, clear of the danger zone.

So my main recommendation for reform would be to make the Stamp Duty levy progressive like Income Tax. A home priced at £300,000 should pay no Stamp duty on the first £125,000, 1% on the next £125,000, and 3% on the last £50,000 of the price. Total Stamp Duty under this system would be £2,750 on a £300,000 house, instead of £9,000 today.

This would make homes more affordable. Could there be a loss in revenue? There may not be. Transactions would increase. The loss of revenue at the top end, where much of the duty is raised, would be very slight. The London market with its £10m plus transactions at the top end would still see such buyers paying nearly £700000 as today on a £10m purchase. The higher the price, the lower the loss of revenue as a proportion of the tax from the system I have described.

Given the political dislike of rich people and high property prices in modern UK, the government could introduce a hybrid system, where anything over £2m still had to pay 7% on the lot.

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  1. Sandra Cox
    Posted December 5, 2014 at 5:56 am | Permalink

    John, off topic, but due to the unseemly haste and “fit of panic amongst our present leaders”, a few words of wisdom from Lord Tebbit in yesterday’s Daily Telegraph, on devolving England into regions:

    “….. Lord Smith tried to avoid the issue by proposing devolution of most of those matters to English regions so no one at all would have votes on them at Westminster… But think about it. Who asked the English if they wanted England to be broken up in that way?
    ….. Anyway, why on Earth should any one believe that a whole raft of new mega-councils or regional assemblies would bring better government? For sure, it would bring more government. More elected politicians, more officials, more laws, more chief officers earning more than the Prime Minister, more government buildings costing more money and for what?

    It took the best efforts of our Anglo-Saxon forebears several centuries to begin the process of creating an English nation state. The Normans finished off the job and created the Kingdom of England. With the union of Scotland and England we were able to create the worlds leading military, industrial and economic power and the greatest Empire ever seen.
    Now it seems, driven by a fit of panic amongst our present leaders, we are going to see the break up not just the United Kingdom, but even England too. The only gainers would be Our Masters in Brussels who would have achieved one of their great ambitions. The end of a European nation state powerful enough to be prosperous outside the European State.
    Perhaps the Gods do indeed make mad those they would destroy.”

    John, the north-east has overwhelmingly rejected regionalisation already. Surely, Osborne, Clegg, Heseltine et al can’t be allowed to run roughshod over that? Surely, the English must be given a referendum? Surely, Cameron, Osborne, Hague are all behind England – aren’t they!??

    Or are we seeing the last nail in the coffin of England – engineered by Brussels, hammered in by New Labour, hammered home by the Conservative and Unionist Party? Shame on all of them!

    • Lifelogic
      Posted December 5, 2014 at 9:02 am | Permalink

      “Are we seeing the last nail in the coffin of England – engineered by Brussels, hammered in by New Labour, hammered home by the Conservative and Unionist Party?”

      Yes unless UKIP and the Tories do some deal to win this election. Cameron seems determined to throw another election.

      • Hope
        Posted December 5, 2014 at 6:04 pm | Permalink

        Clegg and Osborne agreed the proposal to have a mayor in Manchester despite the public resoundingly rejecting it. They are determined to regionalise the Country for the EU so it is too weak to survive by itself outside the EU.

        Tories have increased so many taxes that it is difficult to make any difference between between Labour’s tax, borrow and wasteful spending and their own.

        Today. See it is now law to give away about £12 billion a year on overseas aide £2 billion of which is spent by the EU without any say from our own government. Final nail in the coffin about having any idea about how to run an economy and living within your own means. The two posh boys are clueless.

        • Hope
          Posted December 6, 2014 at 12:04 pm | Permalink

          People writing today about concerns for state pension when the minister claims £500 million is a lot of money. When the government gives away £12 billion it is counted in percentage terms of GDP to make it sound small. Twelve billion pounds borrowed to give (money ed) to rich countries like India to finance its space programme, millions to Argentina who publicly declare their disdain for the UK. The recent report on overseas aid which makes it clear how much of it is still wasted and given to undeserving causes, why was this not highlighted in the debate at Westminster. This government is simply not fit for purpose and Westminster needs radical change, you know, the change Cameron promised in 2009 and failed to deliver.

      • bluedog
        Posted December 5, 2014 at 8:40 pm | Permalink

        Think about Coalition dynamics, in so far as the current Coalition has destroyed the Lib-Dems. Assuming UKIP electoral voting intentions translate into votes, Farage would be far better off remaining independent while giving the Conservatives enough support to be able to form a minority government. UKIP’s position would be stronger within an informal coalition that enables Farage to retain his negotiating leverage on a case by case basis. Such a form of minority government would be messy but it could be made to work. Farage needs to be able to ensure that Cameron keeps his word on the EU referendum. Her Majesty’s Loyal Opposition would then consist of Labour, the Lib-Dems, the Greens and the SNP, all pro-EU. Thus UK politics may soon re-align on EU driven criteria. Some very capable Lib-Dems such as Danny Alexander might even be persuaded to join the Conservatives.

        • Hope
          Posted December 6, 2014 at 8:46 am | Permalink

          No right minded person would vote Tory thinking they would get a conservative in government. Look at the action over the last five years, economy, immigration, EU, taxation, crime and disorder, public services (Osborne said this week we still receive the same services!), gay marriage, expensive energy, expensive water, expensive food, expensive travel….

          You name it they have failed resoundingly to deliver anything remotely like a conservative government. Osborne spoke last week as if he had achieved something over the last five years and portrayed the deficit and debt to be something completely different from reality.

          • Lifelogic
            Posted December 6, 2014 at 6:12 pm | Permalink

            Indeed the only possible reason to vote Tory is that they are not quite as bad as Labour or the Libdems. If I still lived in the UK I would vote for whoever was the stop Labour (or Libdem in one or two areas) candidate. Be that UKIP or Tory. Unless I lived in one of the circa 200 seats held by “Tories” such as Ken Clark. Where I could not ever bring myself to vote Tory.

      • Mondeo Man
        Posted December 5, 2014 at 11:02 pm | Permalink

        Lifelogic – The BBC are well into the Tories:

        A) On ‘terrifying’ austerity to come (Daily Mail columnists are even on about the threat to the NHS)

        B) On the Border Farce shambles

        And do you know what I think of such bias ? I don’t care anymore ! (I did once)

    • Bert Young
      Posted December 5, 2014 at 9:31 am | Permalink

      Norman Tebbit is one man who , in my opinion , always shows down to earth common sense . He should always be listened to and his advice followed ; he would have been a first-rate Prime Minister .

      • Lifelogic
        Posted December 5, 2014 at 3:25 pm | Permalink

        Indeed get him cloned, such a shame he had to leave politics early due to the Brighton bombers injuring his poor wife.

        Where are the sensible people now, I assume Cameron types will not let them join or due to Cameron’s presence they do not want to join. This as he clearly prefers “A list” celebs and all lefty pro EU, greencrap dopes.

        Reply I tried to persuade him to run for Leader when Margaret stood down, but he decided it was not possible.

        • Lifelogic
          Posted December 5, 2014 at 4:57 pm | Permalink

          To Reply: What a tragedy and what a high price the country paid and is still having to suffer Major, Blair, Brown and Cameron as a result.

          Mind you the UK was already in the stupid ERM at that point, taken in by John Major as Chancellor. But then I am sure he would have exited it before it inflicted such massive & pointless damage on jobs, people’s homes, businesses and then destroyed the Tory party’s reputation for running the economy sensibly.

          • Hope
            Posted December 5, 2014 at 6:08 pm | Permalink

            I understand the LandRover Defender will stop being made in this country next year because of an EU regulation about air bags. If correct another loss of jobs and revenue for the country. How many people died in LandRover accidents because they did not have air bags I wonder. A world beater for so many years if ever there were.

          • Lifelogic
            Posted December 5, 2014 at 7:41 pm | Permalink

            The pointless damage the EU and their bonkers regulations inflict on competitivity, jobs, efficiency and UK industry huge.

    • agricola
      Posted December 5, 2014 at 11:16 am | Permalink

      Absolutely correct, we want less government not more. I share your conspiracy theory that both Brussels and the leadership of the three main political parties in the H o C are intent on the destruction of the United Kingdom. The sooner they are emasculated the better.

    • DaveM
      Posted December 5, 2014 at 11:23 am | Permalink

      Sandra – I was in a good mood until I read your post!!

    • Gumpy Goat
      Posted December 5, 2014 at 1:12 pm | Permalink

      What masters in Europe? A federal UK is coming may as well get used to it. Great opportunity to reform the house lords to take that move in to consideration. The problem with the UK is the dominance of London. Virtually no other country has a capital which is so dominant. Lets us break this dominance, lets say move the supreme court to Glasgow. I live near London you would think the rest of the country never existed. Move ITN to Newcastle, Sky to Leeds may also help.

      • DaveM
        Posted December 5, 2014 at 4:14 pm | Permalink

        GG – right on.

        Nice to see someone else who doesn’t subscribe to the conspiracy theory/pessimist approach re the EU. I likewise cannot conceive that the people of this sceptred isle will simply allow the EU to take over. It just won’t happen unless it happens by force – and good luck with that EU!! I just wish the current govt and opposition would stop taking us further down this rabbit hole because it’s just going to make it more painful to get out in the medium term.

        Just need someone in the right position to get the ball rolling – Mr Redwood hint hint…! Sorry – straying way off topic.

      • Mondeo Man
        Posted December 5, 2014 at 11:05 pm | Permalink

        Gumpy – England is smaller than any US state. I disagree with you on the issue of London’s dominance being unusually great.

        • Denis Cooper
          Posted December 6, 2014 at 5:43 pm | Permalink


          With a population of about 54 million England is more populous than any US state, California being top with about 38 million, and in terms of area it’s bigger than 19 or 20 of the 50 states.

          • Mondeo Man
            Posted December 7, 2014 at 2:06 pm | Permalink

            Denis – Worse than I thought then.

            A) In terms of our population density (we are overcrowded)

            B) In terms of my lack of education 🙁 (I’m the first to admit it)

            But in terms of geographical proximity to the political centre my point stands – our population is far closer to its parliament than in America.

            Such a small space as ours cannot tolerate much diversity. And it won’t for very much longer. In a couple of hundred years our people will be all the same again… only different !

            I don’t mind that. It’s getting there that I worry about. Whoever dominates London will dominate Britain.

            Then again I’m talking tosh.

            We’ve both missed the elephant in the room. The EU is now our political centre.

    • Denis Cooper
      Posted December 5, 2014 at 6:07 pm | Permalink

      Well, he’s mostly wrong about:

      “The Normans finished off the job and created the Kingdom of England.”

      because England had already been unified as a kingdom well before the Norman Conquest by Athelstan, ca 894 – 939; who claimed to be, and at the time was accepted as, and indeed is still usually accepted as, the first king of all England, and who also claimed to be and at times was accepted as the king of all Britain; but with Cornwall as the last part to be incorporated into England yet continuing to have something of a special, and rather debatable, status.

    • Mark B
      Posted December 5, 2014 at 8:03 pm | Permalink

      Still waiting on that replied we were promised by the end of November.

    • William Gruff
      Posted December 8, 2014 at 12:19 am | Permalink

      The Normans finished off the job and created the Kingdom of England.

      England had been a single unified kingdom for about one hundred and fifty years before the Norman conquest and ÆÞelstan is considered to have been the first king of England, or was when I was a student of early mediaeval English history, unless my memory has deserted me.

  2. Mark B
    Posted December 5, 2014 at 6:52 am | Permalink

    Good morning.

    My dislike for Stamp Duty is well known here. I dislike it because, it is a tax without meaning. There is no cost to the Government and, it is up to the buyer to find the monies to pay it.

    If there is to be a tax levied against property, then it should be levied solely upon the seller of the property. After all, it is they that are getting the cash.

    Also, there should be some additional relief. If a buyer purchases a property with the intent on selling it for a profit a short time later, then they should be charged an additional fee*. But someone who has lived say, 10 years in a property, would not be charged so much. This would stop an awful lot of, mostly, foreign speculators coming into the market and driving up house prices.

    We also need to look at the rental market. Private ownership is not always suitable or desirable. It is my view, that the Government should make it compulsory for Landlords to be members of officially recognised bodies, and from those bodies, they must obtain suitable certification, confirming that their properties are suitable for habitation. Those Landlords who do not comply, will not be permitted to rent such properties, and those that transgress the rules, should have their certificates revoked and their ability to rent ceased. Any Landlord breaking the law, and it should be law, would have their properties confiscated, and be fined. This would ensure that there is both ample and good rental housing stock. And intern, would help to drive down rents and remove from the market, bad Landlords.

    With more people in rental accommodation, we would see fewer buyers. Fewer buyers will help reduce prices and, create a more stable market place. Then the Government can begin to withdraw this tax and just concentrate on a flat exchange free set over the length of time the seller has been in the property.

    * It should be a flat fee. Say, £500 between 0-3 years. £250 between years 4 and 5. Nothing after that. And it should be placed on the Seller, not the buyer.

    • Denis Cooper
      Posted December 5, 2014 at 6:09 pm | Permalink

      Why not just apply a sensible capital gains tax regime to domestic property?

      • Mark B
        Posted December 5, 2014 at 8:02 pm | Permalink


        I essence it is. But I am against taxation just for the sake of it. But if there are speculators in the market, then it is the duty of Government to act so that the market both remains free and fair. Creating artificial bubbles, which burst, causes great harm. A tax or levy is a reasonable enough measure to prevent speculation.

        Homes are to live in, not gamble on.

      • alan jutson
        Posted December 5, 2014 at 8:40 pm | Permalink


        “Why not apply a simple Capital gains tax to domestic property”.

        Because it would not be sensible for long even if it was started that way, and someone like me who built their own house and has been in it for 35 years would pay so much tax if I sold it, it would be pointless even thinking of moving.

        Just look at the present CGT shambles with no taper relief..

        • Denis Cooper
          Posted December 6, 2014 at 5:56 pm | Permalink

          Well obviously people should only be taxed on the real appreciation of an asset, not on the increase in its value in money terms without taking into account inflation. And in the case of domestic property there could be an allowance for modest appreciation in real terms, so for example the original purchase price could be inflated by 4% a year during the period of ownership before calculating any taxable increase when the house was next sold. Nowadays it could be easy to go on the website of the Land Registry and discover the uplifted tax exempt figure for your own house and the capital gains tax that would be due if you now sold it at a certain price.

        • Lifelogic
          Posted December 6, 2014 at 6:15 pm | Permalink

          CGT on main residences would stop people moving! As does stamp duty. And it would be a real vote loser.

          • Denis Cooper
            Posted December 7, 2014 at 11:56 am | Permalink

            On the contrary, when coupled with the complete abolition of stamp duty it would be a net voter winner once all those many millions who already owned their house at the point when the tax regime was changed realised that they would still pay no tax on their capital gains when they sold that house, and moreover they would pay no stamp duty when they bought their next house; so they would have nothing at all to pay to the taxman until they came to sell that next house, which would typically be many years hence, and even then they would only be taxed on part of whatever real profit they had actually made from the sale of that next house not taxed just for the privilege of buying another house.

            It would be unlikely to win the small numbers of votes from two kinds of extremists, those on the one hand who believe that all tax is theft and those on the other hand who believe that all private property is theft; however it might win the votes of many young people who have not yet got their feet on the first rung of the property ladder and who not only need to take into account the possible cost of stamp duty on their first house purchase – even a very modest house in some parts of the country, the average price of a terraced house in Reading being nearly twice the £125,000 threshold for stamp duty – but see house prices rising faster than the growth of earnings and so their dream of home ownership constantly moving further and further out of reach.

            I expect that most of those mainly young people would also much prefer to postpone their interaction with the taxman until they sold their first house, and if a tax on their capital gains on that house meant that they had less money to put into their next house many other people competing for the kind of house they wanted would be in the same boat and the market would have adjusted to that fact.

            Finally there is a large tranche of voters who have no direct personal financial interests in houses and their prices, for various reasons, but agree with Mark B above that:

            “Homes are to live in, not gamble on.”


            “Creating artificial bubbles, which burst, causes great harm.”

            and would in principle welcome the government aligning its tax policy with those ideas.

            The market has long adjusted to the present stamp duty regime, and will now react to Osborne’s changes to that regime, and would no doubt adjust to a new tax regime where owners were only taxed on part of their real profits when they sold the house, which I would provisionally say should be the part in excess of an appreciation of 4% pa during the period of ownership, 2% as real gain over and above the 2% inflation target; there is no reason why the market should effectively shut down as you suggest.

      • bluedog
        Posted December 5, 2014 at 8:56 pm | Permalink

        No. Inevitably capital taxes become an instrument for taxing the citizen on the effects of inflation, which may or may not have been an instrument of state policy in order to inflate away the state’s debt. Take Inheritance Tax as the worst example. My late father bought a house for £22,000 in 1967. He died last year and the house has been revalued at £2,850,000, a notional gain of c129 times. What did he do to the property to generate this gain? Absolutely nothing, but even after deduction of the Inheritance Tax threshold, the impost is massive. One gives thanks that HMRC will now be able to finance social housing for a large number of benefit seeking migrants.

        • Denis Cooper
          Posted December 6, 2014 at 6:11 pm | Permalink

          Well, that’s an average return of just under 11% pa compound for, as you say, doing nothing, and that’s without touching upon any tax relief that he may have received on his mortgage interest back in those days; and if as you say he himself did nothing to enhance the value of the property I suppose it is likely that his heirs also did nothing in that regard; they may or may or not have done something to merit receiving their legacies, but of course I know nothing of the circumstances and cannot comment; however personally I would not rush to gripe at taxation of a large legacy one way or another, either through a tax on the real capital gains tax made on a property or through a tax on the legacy itself.

  3. Jon
    Posted December 5, 2014 at 6:58 am | Permalink

    Scotland’s first experience of devolved taxes is higher Stamp Duty from April than England and Wales. Will be interesting how that all pans out.

  4. bigneil
    Posted December 5, 2014 at 7:26 am | Permalink

    Far too sensible John, there is no wonder you never made PM with ideas like this.

  5. Old Albion
    Posted December 5, 2014 at 8:23 am | Permalink

    Whilst welcoming this long overdue alteration to ‘stamp duty’ I feel the rate of 5% for transactions over £250k is far too high. I would like to see this cut further to say, 3% up to £500k. Then 4% up to a million.
    What happens after £1m ? Along with about 98% of the population, I’m not too concerned.

    • Gumpy Goat
      Posted December 5, 2014 at 1:13 pm | Permalink

      yep I am also not concerned what happens after £1m

    • scottspeig
      Posted December 5, 2014 at 1:37 pm | Permalink

      “What happens after £1m ? Along with 98% of the population, I’m not too concerned”

      Not yet – but then again, when stamp duty was originally introduced, it was only meant to be the rich lot – now, it’s everything bar the first comer non-southern

      • JoeSoap
        Posted December 5, 2014 at 5:54 pm | Permalink

        Indeed, and Income Tax too… wait until we are all paying 12% on every house purchase…

  6. Mike Wilson
    Posted December 5, 2014 at 8:35 am | Permalink

    Despite hating the fact I had to give nearly 20k of my hard earned money to the government last time I bought a house – the simple fact is that the insane nature of our housing market means – if the government don’t take the money, the vendor will.

    Houses (generally) sell for the highest price based on what banks are willing to lend to the suckers that buy them. If the government abandoned stamp duty, house prices would not fall one penny.

    For most people the stamp duty ends up effectively as part of their mortgage. The mortgage would be the same size with, or without, stamp duty. It is just that with stamp duty the government gets part of the money you borrow, without it – the vendor would get that money. Either way, you still owe it to the bank and end up paying back more than twice as much as borrow.

    • alan jutson
      Posted December 5, 2014 at 9:13 am | Permalink


      Just ask who is better at spending money, those who earned it, or the government.

      Do not forget that if the people who earned it (and paid tax on it) kept it, when eventually they did spend it, the government would get the VAT, unless is was for food.

      • Lifelogic
        Posted December 5, 2014 at 3:27 pm | Permalink

        Who is better at spending money? The people who earned it and know what they want of course. This by a factor of at least two and often far more.

    • Roy Grainger
      Posted December 5, 2014 at 9:20 am | Permalink

      Exactly. I have made that point an number of times here but John insists on calling the cuts “good news for buyers”. In a free market the price of houses will always be at the level those wanting to buy can just afford, so a stamp duty cut will, on average, lead to a rise in prices to compensate. It is the same with VAT and income tax, cuts tend to fuel inflation.

    • Matt
      Posted December 5, 2014 at 9:46 am | Permalink

      That makes no sense at all.
      House prices are determined by supply and demand, like anything else.
      If you have to pay 2% stamp duty buying a house, you end up buying a house with a market value 2% lower so that you can afford the stamp duty.
      Anyway, vendors are generally just ordinary citizens to, and more often than not, one is selling a house at the same time as buying one. So the people would still be getting their money back from the government.

      • Lifelogic
        Posted December 5, 2014 at 4:59 pm | Permalink

        How are they getting their money back from government they take the 2% and nearly always waste it, or at the least half of it on complete drivel.

    • Mark
      Posted December 5, 2014 at 12:37 pm | Permalink

      I suppose you can argue that the money goes to the deposit rather than the tax when you lower or abolish the tax: that means a slightly lower LTV (although the same sum is borrowed) and perhaps marginally more competitive mortgage terms in consequence. I think we can expect quite a few properties to be re-priced from the breakpoint levels to rather higher ones: I shall be monitoring this using “property bee” software that tracks the advertised history. The breakpoints created considerable spikes in the price distribution historically – when I looked at it in 2013 I found almost 3% of all sales were at £249,950-250,000. High end properties can expect lower prices: after all, a £20m property now has roughly £1m more SDLT payable.

    • Lifelogic
      Posted December 5, 2014 at 12:43 pm | Permalink

      Some truth in that it does push down asking prices and hit the sellers more than buyers but many are both. But if you are buying an expensive house now for less than say 5-10+ years it is not usually worth it. Stamp duty making renting better in most cases it should be a level playing field.

      It also destroys general confidence. How many taxes do these tax borrow and waste people actually need to waste on incompetently delivered services and endless daft regulations.

      NI 23%, Income tax 45%, stamp duty 12%, non dom tax £80K, vat 20%, fuel duty 180%?, rates, insurance tax 7%?, flight tax, pension taxes, airport tax, council tax, green energy taxes, IHT 40%, land fill tax, Vehicle duty, alcohol duty circa 180% plus endless mugging and late fines – is this not enough for them to largely waste?

      The other problem with stamp duty as it is lost on purchase it makes banks less likely to lend as much for the property as they know that if it is sold the new buyer will have to pay stamp duty again. So more deposit + these costs is needed from buyers that they often cannot borrow.

    • StevenL
      Posted December 5, 2014 at 2:41 pm | Permalink

      This is the way I see it too. Personally I wouldn’t buy a house. It makes sense as a long term investment, borrowing up to 15 times the rental earnings and using a limited company so you can hand the keys back and walk away if events conspire against you.

      As an individual I wouldn’t want to get into the level of debt needed to buy anything worth owning, it’s just far too risky in an incertain world. I know our host likes to bang on about not paying rent when you retire, but there are plenty of cheap rented retirement options in sunnier climes where your joints don’t freeze and being outdoors is pleasant all year round.

      • DaveM
        Posted December 5, 2014 at 4:30 pm | Permalink

        Why’s that Steven?

        I can think of nothing better than working for 45+ years just to make a massive corporation richer by paying twice the asking price for a pile of bricks and mortar that the govt will force me to sell, to pay for retirement care and medical care if I get ill in my old age (because I haven’t lived on housing benefits my whole life).

        And if I don’t get ill and require care, my kids – who I hope will be nearing retirement by the time I clock off – will have to go through the hassle of selling the damn place, giving a huge chunk of the proceeds to the govt, and splitting the remainder between my grandkids who might be able to afford to buy a second hand car with it.

        Or alternatively, I could use the money which I might otherwise spend on a mortgage to invest in my kids’ education in the hope that they will be totally self-sufficient and successful when they’re grown up, then put the “mortgage money” in a high interest account, hoping to accrue enough funds that the interest on said account will pay the rent, and that I can leave a big lump sum for the grandkids. (If I havent spent the lot on a winnebago and my bucket list anyway!!)

        That’s obviously hoping that the govt manages to get through the next 30 years without having to raid our savings Cyprus-style. How much is rent on property in the Caymans..?!!

    • Denis Cooper
      Posted December 5, 2014 at 6:34 pm | Permalink

      I agree that “if the government don’t take the money, the vendor will”.

      As a rough and ready picture, I think the only people who will actually, positively, benefit from these changes to stamp duty are those who already own (or part own) a quite expensive large family house, or similar, and who wish sell that house and not buy another – in many cases they will have inherited the house, while already having their own – or wish to move to a smaller house, or wish to move to a cheaper part of the country, or perhaps wish make use of some equity withdrawal scheme.

      Below that range in the market all of the tax benefits for purchasers lower down will be absorbed into the prices demanded by their respective vendors and effectively rolled up to boost the market values for those fortunate owners in the optimum range, while at the top of the market property values will be trimmed back by the higher tax imposed on purchasers.

      I express no particular view on whether this will be a good or a bad thing, I just think that is how it will probably work out.

  7. oldtimer
    Posted December 5, 2014 at 8:50 am | Permalink

    The element of spite towards the well-off, always prevalent in British politics, has been reinforced by Mr Osborne`s rejig of stamp duty rates. It is unlikely to succeed in buying off Labour or LibDems for calls for a mansion tax. They will persuade their supporters that a free lunch will continue to be available at the expense of the rich.

    Actions always provoke reactions. My guess is that fewer wealthy people, who have a choice, will decide to take up residence here or, of that some of those already here will decide to leave. The consequence will not be the change in stamp duty raised but in total spending foregone by the UK economy as a whole as those so explicitly targetted vote with their feet and their wallets.

    And who would blame them? The government`s failure to get the needed grip on public finances and the wishful thinking embodied in the Autumn Statement makes the UK a dodgy prospect despite all the huffing and puffing about growth. We need to remind ourselves that it is a house built on QE and, if I heard the Governor of the Bank of England correctly, it is going to stay that way.

    • Lifelogic
      Posted December 5, 2014 at 12:49 pm | Permalink

      Indeed as you say:

      “The element of spite towards the well-off, always prevalent in British politics, has been reinforced by Mr Osborne’s rejig of stamp duty rates.” I do not think this will win many votes on the left anyway. They will vote Labour/Libdum anyway.

      Furthermore his blatant ratting on the £1M IHT promise (now just forgotten) and his continued mugging of largely private sector pensions. Any all his 300+ other tax increases. All for him to waste on ExoMars trips, HS2/3, Stone Henge, the EU, green crap grants, a poor NHS/School and endless other pointless drivel.

      • Mondeo Man
        Posted December 6, 2014 at 12:23 am | Permalink

        Lifelogic – The ‘spite’ towards the well-off may be described as populism.

        If it is to gain votes then I think it is a mistake.

        As I see it most people don’t feel spite towards the well-off. In fact rich people are among the most popular and well loved people in Britain. None of their wealth is begrudged – unless they try to lecture the rest of us on frugality.

        That the English are jealous of success is a myth. Our greatest pastime is pouring money into the bank accounts of footballers and rock stars.

        • Lifelogic
          Posted December 6, 2014 at 9:06 pm | Permalink

          It is an attempt by the left to buy votes. Vote for me and I will give you some money stolen of the rich. I agree if often fails but there are enough alas who are fooled by it.

  8. Antisthenes
    Posted December 5, 2014 at 8:51 am | Permalink

    “Given the political dislike of rich people”

    When the politics of envy kills off the geese that lay the golden eggs or sends them to better pastures abroad who is going to pay for the welfare state seeing as they pay the most taxes? Lefties do not understand the consequences of what they do or propose. However it appears many on the right do not either any more but then that may be the right just taking a leaf out of the left’s book and resorting to bribery to win elections. What ever the reason this idea of spend now and pay later cannot go on for much longer. Looking at OBR figures who ever is in power after May 2015 are going to have to do some very unpopular things to balance the books. Perhaps this is one election the Conservatives would be better off losing.

    • Brian Tomkinson
      Posted December 5, 2014 at 9:27 am | Permalink

      “who ever is in power after May 2015 are going to have to do some very unpopular things to balance the books.”
      That presumes that any of them actually want or intend to balance the books.

    • Roy Grainger
      Posted December 5, 2014 at 10:49 am | Permalink

      As far as I am aware Ed Balls has promised to somehow eliminate the deficit too so he will have to do the similar cutting. The “Conservatives better off losing” thought is appealing in some ways, the thought of a Labour/SNP coalition trying to ram through English welfare cuts to meet Balls’ targets raises a smile.

    • Lifelogic
      Posted December 5, 2014 at 12:51 pm | Permalink

      Exactly even the non dom taxes are now getting far too high for many people.

    • Gumpy Goat
      Posted December 5, 2014 at 1:15 pm | Permalink

      Yep give it to UKIP that will be interesting I do not think they can count never mind design a economic policy.

      • Denis Cooper
        Posted December 5, 2014 at 6:47 pm | Permalink

        Keep the insults coming, like Cameron you need not concern yourself that the ordinary people you are choosing to insult all have votes.

        • Mondeo Man
          Posted December 6, 2014 at 12:32 am | Permalink

          They just never learn, do they, Denis ?

          Tory smut and Tory insult. It really makes the flesh creep.

          In any case. We’ve been counting in negative figures for so long that the Tories have confused negatives with positives.

          Hence the massively increasing debt is seen as a success !

  9. formula57
    Posted December 5, 2014 at 9:00 am | Permalink

    I am quite content with what Mr Osborne has done for it is broadly sensible so far as making minor but welcome change to SDLT is concerned but it also will sustain house price growth, a very great comfort to those of us who like our delusion that we are all rich and living in a vibrant economy. Of course, some moaning minnies will say as house price inflation is excluded from official figures fostering same is a stealthy way of introducing inflation in to the economy but I say rejoice, rejoice, and thank you George.

  10. alan jutson
    Posted December 5, 2014 at 9:00 am | Permalink

    Amazing how times change.

    Amazing also the change in political opinion.

    50 Years ago people were encouraged to purchase a home (not houses) simply to live in.

    They chose to do so for their own security, peace of mind, and to provide a settled place to live for themselves and their families, indeed they were even encouraged, with tax breaks available on interest on loans taken out for such purchases.

    For many it was an aspiration to own, so that you could be in charge of your own destiny, your own quality of life, after living perhaps for years in poorly serviced rental accommodation with little security.

    We move on, and 50 years later anyone owning or thinking of purchasing a home has to pay the government huge sums of money, simply for that same peace of mind.
    Yes of course if you are going to charge at all, then any tax should be fair.

    Why should people who live in different parts of the country be hit with larger percentage tax payments, simply because that is where they want, or need to purchase a home to live in.

    Yes of course a progressive tax is better than the slab tax that we had, but why a tax on houses at all, a place of security where we shelter, comfort and nurture our families.

    If we are to pay tax, why not a simple single rate, no matter what the value , then you still have, the more you spend the more you pay mantra without additional penalties.

    Different and increasing rates simply penalise aspiration, or impacts people in different areas.
    Indeed you could say it is a tax on someones borrowing ability, as the tax is paid on the complete value, including mortgage debt.
    Thus if you borrow say 90% of the property value, then your tax bill could amount to nearly 20% of your deposit, at average house values.

    Such a shame that due to total and utter financial incompetence, governments of all colours and nations just see the population as cash machines to be milked as they wish.

    Yes of course the Budget changes are for the better, but I wonder how much fiscal drag on the value scales we are going to see over the years, before we all pay 12% on our next home.


    • Max Dunbar
      Posted December 5, 2014 at 7:52 pm | Permalink

      ‘Why not a simple single rate, no matter what the value’.
      Now there’s a revolutionary (Thatcherite?) concept, except that there should be no tax on moving house – period.

      • alan jutson
        Posted December 5, 2014 at 11:36 pm | Permalink


        I agree, but can you ever see a government give up taxation on anything once it has been started, thus a single low rate is the best we can ever really hope for.

    • William Gruff
      Posted December 8, 2014 at 5:24 am | Permalink

      Such a shame that due to total and utter financial incompetence, governments of all colours and nations just see the population as cash machines to be milked as they wish.

      They are not cause and consequence: All elites see the populations they control as ‘cash machines to be milked as they wish’ and always have, regardless of the colour of the regime. Even were an economy soundly managed, those in control of it would want ever more.

  11. Lifelogic
    Posted December 5, 2014 at 9:15 am | Permalink

    Sensible to get rid of the jumps in rates but turnover taxes are stupid as the stop people moving with their job. Why should someone who moves with their job pay hugely more tax than someone who does not move? Or perhaps have to rent instead of buying.

    Turnover taxes are generally absurd, 12% (as introduced at the top end) is just economical moronic and hugely damaging. There should be a level fiscal playing field between renting and buying, stamp duty is above about 1-2% is a big mistake.

    There should also be a level fiscal/subsidy playing field between trains and cars. So the market there in transport is not distorted. Also in energy, agriculture and most other things but the EU and government cannot stop buggering things up.

    Ferries now to be more expensive and (less energy efficient) due to some new EU sulfur dioxide rules coming in understand. Yet another pointless tax or people from the EU.

    • alan jutson
      Posted December 5, 2014 at 3:44 pm | Permalink


      DFDS have already announced they are scrapping the Porthsmouth Le Havre route for next year, as it is not economical to modify the existing ferry ships on that run to meet the new emissions targets..

      • Denis Cooper
        Posted December 5, 2014 at 6:50 pm | Permalink

        If the EU carries on like that it will be cutting itself off from us, not the other way around as per Clegg’s charge against its opponents …

  12. DadOf3
    Posted December 5, 2014 at 9:18 am | Permalink

    Stamp Duty is a ludicrous tax and acts as a brake on the wheels of the economy. It punishes those who move and rewards those who stay put. Why should one not be able, without penalty, to move closer to one’s work, reducing pollution and expenditure on foreign oil); to move closer to one’s family, to care for them and look out for them, that they don’t become a burden on the public care services; to be nearer to the leisure amenities that one uses, whether countryside or city, sporting or cultural, to improve well-being and productiveness.
    A truly progressive move would be to scrap stamp duty, and council tax too while we’re at it, and get the same revenue from a land value tax.

    • Lifelogic
      Posted December 5, 2014 at 3:29 pm | Permalink


  13. stred
    Posted December 5, 2014 at 9:25 am | Permalink

    We’re all it it together. Well it seems politicians of the main parties are. One lot propose to tax the owners of expensive houses every year as a punishment for their success and then, as it dawns on them that many will leave and sell up, the other side imposes a 12% tax on sales. It is as easy as dynamiting fish. The tax would pay for their ridiculous Stonehenge tunne, so it is just too tempting.

    Labour decides that breaking up England would suit its needs and the Conservative PM appoints a leading wealthy Scotsman to tell us how to govern England and pay for effective Scots devolution. This is after the three party leaders get together with the previous disastrous leader, who draws his salary while hardly bothering to turn up at the workplace, and vow to hand over the goods without consulting anyone. Then then BBC runs a series to consult and explain the plans to their chosen members of the electorate in the street and suddenly the Conservative chancellor decides to visit Labour counsellors in the North, who want more power and allowances. And now we are to have have a Northern Powerhouse with new mayors, just like that!

    It is hard to believe that the majority in Scotland and the Northern areas of England had recently voted for the opposite. But why bother having another vote EU style when the answer was ‘no’?

  14. Brian Tomkinson
    Posted December 5, 2014 at 9:41 am | Permalink

    Stamp Duty needed to be reformed but we shouldn’t just accept that this was all the Chancellor had in mind when he made his statement. As Fraser Nelson points out in the Telegraph: ” Osborne’s Autumn Statement predicts a 30 per cent rise in property prices by the end of the decade – pushing housing further out of reach for ordinary buyers. The Treasury fully intends to cash in on this asset boom. The small print from the Budget shows it expects a 70 per cent rise in stamp duty revenue (in spite of the cut in rates) and 65 per cent rise from inheritance tax – as more estates are pushed over its threshold.”
    Another boost to house price inflation and keep those immigrants coming to further increase housing demand.

    Oh to go back to 2010 and those days of righteous indignation by your party about the state of government indebtedness. As Nelson also reminds us : “Before the election, the Tories ran a television advert featuring a newborn baby saying it had “Dad’s nose, Mum’s eyes – and Gordon Brown’s debt”.The advert blamed “Labour’s debt crisis” for every child in Britain being born owing £17,000. Quite right, but a baby born now would owe about £25,000. We can safely expect no more talk from ministers about indebted babies. ”

    This is the party that you represent and support.

    • Jon
      Posted December 5, 2014 at 9:42 pm | Permalink

      Don’t get those figures? If we assume debt interest is £75 bn and a new start works for 45 years with an average working population of 35 million between now and 2070 it’s near a £100,000 that they pay for Gordon Brown’s debt. Lets perhaps not go back to 2010 when Cameron and Osborn were realising the overspend but way back to the turn of the century. The end of post war boom, globalisation so low growth and an ageing population, Brown chose a credit leveraging boom to make up the difference and some of us were appalled then.

      Unfortunate that the Conservative leadership back then didn’t see the obvious and didn’t know math, for all the good education they had!

  15. David
    Posted December 5, 2014 at 9:48 am | Permalink

    ‘Given the political dislike of rich people and high property prices in modern UK, the government could introduce a hybrid system’
    Is there a dislike of high property prices? Every government since 97 has left office with prices having risen by a lot, I thought politicians love expensive houses for some weird problem

  16. Bert Young
    Posted December 5, 2014 at 9:55 am | Permalink

    Voices of wisdom and understanding seldom receive the attention they deserve . The fault lies with those to whom the messages are intended . Leaders who are blinded by their egos , who lack real work experience and have no strategic plan , are always bound to be drifted off by any breeze that blows near them . Slamming the rich by some means or other will never create the benefit intended ; comments already made to this blog bear out this fact .

    Mention should also be made of the imposition of the tax on Non Doms who have resided here for some time . In most cases these individuals are hit by their countries of origin who require them to pay taxes on their worldwide income ( eg the USA ). Were I affected this way , I would pack my bags and head off home . London – where most of these individuals live , is not a cheap place to reside in the first place .

    Osborne’s Autumn statement is nothing but the firing off of the election campaign . His promises and forecasts dig far into the future and entirely depend on who continues to manage the economy . Whoever now makes intelligent recommendations will be subsumed by political expediency . God help us !!

  17. Bob
    Posted December 5, 2014 at 10:05 am | Permalink

    What is tax for? is it about punishment and reward ?

    How come children under 12 years old don’t cause CO2 emissions when travelling by air, but children over twelve do? Has this been scientifically proven?

    Stamp duty should be a flat 1%, the more you pay the more you pay.

  18. Lifelogic
    Posted December 5, 2014 at 10:37 am | Permalink

    Yes get the endless (anti car) traffic lights turned off or put on solid amber at night. Most of them serve no purpose (other than increasing fuel consumption and delaying people). Mind you during the day many are pointless too.

    Then get rid of the island, idiotic bus and bike lanes, the road blocking one man buses, the mainly pointless no left and right turns, those daft bus stops that projection into the road to block the traffic when the bus stops …………..

    It could be the most popular and useful thing the Tories have ever done since the M4 bus lane. Good to see the tolling at Dartmouth “improved” to stop congestion – though many will not get fined, it should just be free.

  19. agricola
    Posted December 5, 2014 at 11:26 am | Permalink

    A tax we could abandon altogether if only politicians would grasp the no spending nettle.
    Sadly, like your average crack addict they can’t give it up. They won’t kill themselves but the nation instead. We want less government locally and nationally they are a drain on enterprise and a negative vibe in every citizens life.

    The recent Autumn Statement is a bit of window dressing to improve conservative chances in May next year.

  20. Eddie Hill
    Posted December 5, 2014 at 12:04 pm | Permalink

    Stamp Duty is one of the many reasons that a Mansion Tax would be grossly unfair additional, since houses > £2 million attract a huge Stamp Duty levy anyway. It must surely be possible to avoid imposing a Mansion Tax simply by making the Stamp Duty bands increase more steeply over £2 million?

    Also, it’s quite possible that the Laffer Curve will bring in more revenue notwithstanding lower Stamp Duty rates and bands, as people stop manipulating the “contract” value of their houses to avoid triggering the step increases you refer to.

  21. petermartin2001
    Posted December 5, 2014 at 12:08 pm | Permalink

    I do not like Stamp Duty. Houses are dear enough, without imposing an extra tax on people trying to buy a home.

    I’m not sure about this. Maybe it would increase prices, if it were applied at the bottom end of the market, but does it increase them at the top end?

    Say a house sells at auction for £1 million when there is a tax bill of £50,000 to pay. What would be the price if there were no tax bill? Would it still be £1 million or would it be £1,050,000 ? I’d say it would be the latter. In a competitive auction the bidders drop out at a price they can’t afford. That price would have to include the tax payable.

    If this is true, then the tax wouldn’t affect buyers but would adversely affect the sellers. The government is taking a cut of their capital gain. Stamp duty also must act as a disincentive to those wishing to speculate in property. Buying property and keeping it empty, for example.

    That must be a good thing overall.

    • Denis Cooper
      Posted December 5, 2014 at 7:00 pm | Permalink

      I think there will be a certain range in the market where many sellers will enjoy a net positive benefit from the reductions in stamp duty levied in and below that range, provided that they are just selling and not also buying at the same time – for example, they are selling a house they have inherited – or they are downsizing and/or moving to a cheaper part of the country.

    • Max Dunbar
      Posted December 5, 2014 at 8:15 pm | Permalink

      I agree completely.
      If the bicycle market is to be properly controlled so that those rich cyclists who can afford a comfortable, fast and luxurious machine can afford to pay the tax, who is to say that the market would not reward the seller the amount that the government would otherwise receive in revenue? This iniquitous situation where a seller may profit by an extra 50 quid, for example, must be discouraged. And as for those hoarders of bicycles of whom we have heard so much lately, most of whom are foreign buyers I may say, new laws must be introduced to discourage the practice immediately.

  22. A different Simon
    Posted December 5, 2014 at 12:08 pm | Permalink

    Any transaction tax on house sales beyond a nominal sufficient to discourage trading is a bad tax .

    There is a need to consider the issue what private ownership of land means and where it comes from .

    Ultimately it is just a right of conquest ; someone got their first and likely didn’t pay a cent for it and thereafter people either threw them off it or purchased it from them or was given it by the king .

    A lot of common land was enclosed over the past 100-150 years ; i.e. stolen from society .

    We now have a legal and political system which enshrines the power of landowners and restricts the development of land to constrict availability of housing .

    The time has come to reverse this by requiring all land owners to pay an annual fee to society for the right to exclusive use of the commons . This is sometimes called a location value tax .

    Moving the burden of taxation from labour onto land works well as shown by Singapore and in the past Hong Kong .

    As things stands mortgage lenders and people who own land with the highest potential rentable value win and everyone else loses .

    It’s time for society to benefit from the rentable value of the land , not the few .

    It’s amazing that something which is essential private i.e. working and selling your time is taxed to the hilt whereas something which essentially should be public i.e. land is hardly taxed at all .

    • acorn
      Posted December 5, 2014 at 5:44 pm | Permalink

      A Land Value Tax is the way to go as far as I am concerned. There are far too many people sitting on parcels of land, waiting for the local council to build roads and infrastructure around it. This raises its development value and they ain’t paying a bean toward LG costs.

      There is still too much land that has not been registered and/or has no known title holder. This land should be sequestered into local government ownership, by statute, to settle this problem once and for all. including all “ransom strips” and “adverse possession claims”.

      Land value escalates much faster than the pile of bricks and bags of cement needed to construct a building on it; and, we ain’t making any more of it. You can build a decent 900 sq ft, young family starter home for £50 per sq ft. Having to pay two, three or more times that, for a plot of land to build it on is a national disgrace.

      Keeping land out of socio-economic use for capital gain should be a crime. There is no reason why it shouldn’t pay twice the average Council Tax rate (that is 1.2% of its unrestricted use market value per year).

      • Denis Cooper
        Posted December 5, 2014 at 7:02 pm | Permalink

        “Keeping land out of socio-economic use for capital gain should be a crime.”

        It probably was a crime, in the Soviet Union.

      • Max Dunbar
        Posted December 5, 2014 at 8:20 pm | Permalink

        Sounds as if ‘modern Scotland’ may be the place for you if you don’t already live here.

  23. Lifelogic
    Posted December 5, 2014 at 1:00 pm | Permalink

    Good to see Norman Tebbit looking very well and taking his usual sense on the Daily Politics just now – can we clone him please. Why oh why do we always get the Heath, Wilson, Calaghan, Major, Brown, Bliar, Cameron, Clegg disasters. Even Lady thatcher did far, far less than was and is still needed.

    Posted December 5, 2014 at 1:17 pm | Permalink

    The less a government; a local government; a so-named Arms Length management organisation; a private company or a Building Society has to do with taxing or setting interactive fees and constraints on a person’s home the better.

    “An Englishman’s home is his castle”, sadly, has never been the case. His desire to have it so is one of the achilles’ heels by which wicked politicians and governments manipulate not only his choice in a ballot but also where he works, how hard he works, how many hours he works, his career, his number of children and the success or otherwise in some cases of his marriage and future relationship with his children and his economic and practical ability or otherwise of forming love-relationships in the future.

    A deep stinking legal moat, a ring fence, should surround every Englishman’s home as his fundamental human right. That protection and security should also cover the ground beneath which, in this country, is not considered anything to do with him and attracts underground sideways drilling from government encouraged private companies.

    Of course it would be ludicrous, laughable, head-bangingly daft to think the very sky above his house, the air itself, his breathing space, could be prevented from being painted with white vapour trail cream, white, grey and yellow stripes dependent on weather and the whims of bucket and spade tourists. Such utter freedom is but a long gone primeval experience.

  25. behindthefrogs
    Posted December 5, 2014 at 1:44 pm | Permalink

    While I totally support the move to progressive stamp duty, I do not understand why the actual boundaries chosen are such that nearly £1bn is added to the deficit. Anyone purchasing a house for more than £1m should not be seeing any significant benefit over what they would have paid under the old slab system.

    • alan jutson
      Posted December 5, 2014 at 3:48 pm | Permalink


      The break even point is about £940,000.

      Beyond that, you pay more under the new system than the old.

      • behindthefrogs
        Posted December 6, 2014 at 11:18 am | Permalink

        I realized that after I hit send. However I still do not see how the new boundaries can be justified when they increase the deficit. Perhaps I should have said no-one buying a house for more than £750k should benefit.

  26. acorn
    Posted December 5, 2014 at 2:12 pm | Permalink

    Did you know that if an Oligarch, had bought a small flat in Westminster for £1 million say, in the property price dip in 2009, it would have cost him 47.6 million Rubles. If he sold it at today’s price in pounds, he could take home 112.5 million Rubles. Not bad “roundtrip” investment for a sinking Ruble!

    The costs of a speculative buy and sell “round trip” or “flip, in the UK is one of the cheapest in Europe at between 5 – 7 % of the property value. It would be about 17 -18 % in France or Italy. Hence, London is a foreign speculators casino. The changes to Stamp Duty Land Tax, looks like it is meant to yield about 5 -6 % on average across transactions rising to 1.5 million in 2019, should be easy money.

    • alan jutson
      Posted December 5, 2014 at 3:51 pm | Permalink

      The solution is simple, as is one in many other Countries, who charge foreign people who do not live there, rather more in tax than the locals.

      • Mark
        Posted December 6, 2014 at 10:19 am | Permalink


  27. ian
    Posted December 5, 2014 at 2:26 pm | Permalink

    The change in stamp duty will have affect of pushing up houses prices which is what government wants. In the 125 to 600 thousands area the government needs sale to double also in the budget in the year 16/17 he has debt interest come in down by 16 billion that year so if that the case he is hoping that interest on home debt will be 2% or just above. To get houses price up by 10% a year by 2019.

    The reason for this is the government need to get household debt up by 190 billion a year for budget to stay on target, that’s 950 billion in 5 years, if you do not go out and buy houses, cars, holidays and iphones and so on with debt they will have to borrow more money on your behalf, They are hoping that when you see prices going up your greed will kick in and I would say they are on a safe bet. This is a establishment part of the budget and will stand who ever wins power.

    You will see subprime debt back as well to keep the Ponzi going, you will going back in time to 2oo2. The road budget had to go up to allow for the amount of new cars they need to sell to you. BUY BUY BUY it catch 22 in the year 19/20 if all go to plan.

  28. Gumpy Goat
    Posted December 5, 2014 at 2:29 pm | Permalink

    the only cure for this is build a lot more houses!!!!

    • Denis Cooper
      Posted December 5, 2014 at 7:07 pm | Permalink

      Or return to a government policy of encouraging emigration while discouraging immigration; but of course we no longer have the colonies as destinations for the emigration of our surplus population.

  29. ian
    Posted December 5, 2014 at 3:17 pm | Permalink

    As i have said in one of my blogs before the reason establishment has been unable to get the deficit down is because mr brown was selling 60 billion pounds a year of the peoples assets and borrowing 30 to 34 billion a year on top, thats 94 billion a year he did not have tax coming in for, when that went they could not replace it with taxes or growth and thats still the case. Now i hear he is a hero, one the best and smarts politician we have had.

    • Lifelogic
      Posted December 5, 2014 at 3:32 pm | Permalink

      He certainly did not seem to have a clue about economics or indeed history perhaps he should sue Edinburgh University!

  30. nick
    Posted December 5, 2014 at 4:54 pm | Permalink

    Taxation is theft by the state which all politicians seem to think is moral,they just like to quibble about percentages to distract people from the immorality of the act itself.In this they are pastmasters.Still it is we the public who are so easily gulled and will not confront the kleptocrats but rather endorse them every five years at the ballot box.

  31. JoeSoap
    Posted December 5, 2014 at 5:50 pm | Permalink

    This is all fine and dandy while prices are rising.
    When they fall, they will fall like a stone, because nobody wants to pay a transaction tax on a falling knife. So of course we will see a greater propensity to boom (prices increasing, nobody worries too much about stamp duty) and bust (prices fall, government prints more money to make up the lost tax and to cope with the other elements of a bust market).
    Maybe a CGT with a minimum cut-off, say up to £100K profit is tax free, then low stamp duty combination would keep the market moving but not cripple it and lead to more QE when prices fell?

  32. Iain Gill
    Posted December 5, 2014 at 7:13 pm | Permalink

    While the sharp graduations needed fixing, the way its been done, and the timing, its just going to add more to house price inflation. Houses are really not worth the money they are changing hands for. Its silly of the political bubble to continually manipulate the market like this, please please stop all this manipulation and let house prices fall to levels of similar countries.

  33. Denis Cooper
    Posted December 5, 2014 at 7:15 pm | Permalink

    I was surprised to see these changes being described on TV as a “radical” reform of the system; I would say “significant”, and “useful”, and “sensible”, and “long overdue”, but not “radical”.

    A “radical” reform would be to abolish the upfront transaction tax, stamp duty, based solely on purchase price, and instead apply some form of capital gains tax on the profits actually made on resale of the property.

    Of course there would have to be a long transitional period during which houses which last changed hands under the old stamp duty regime would be exempt from the new capital gains tax when they were resold, nobody would be expected to pay both.

  34. Max Dunbar
    Posted December 5, 2014 at 8:33 pm | Permalink

    Rather than discussing the various rates and thresholds of this tax can we just abolish it? After all if, as you are always saying, we need a flexible and motivated labour market why inhibit movement of people within the UK firstly by having a tax which restricts that very movement and secondly an asymmetric system that further distorts the housing market between the north and south of the nation. The newly proposed rules for Scotland just emphasise what this tax is really for – punishment of the middle-class or indeed anyone who has something to lose.
    Why argue on ground of the socialists’ choosing Dr Redwood?

  35. Margaret Brandreth-J
    Posted December 5, 2014 at 9:24 pm | Permalink

    selling your flat off John?

  36. Terry
    Posted December 6, 2014 at 11:21 am | Permalink

    Better still, we should go the American way.
    New York runs a type of Stamp Duty Tax (Closing Costs) that can include a 1% mansion tax for properties over $1 Million. For non-financed homes the Buyer’s Closing Costs are 1.5-2% including conveyancing. However, for those who take out a mortgage a Mortgage Tax is added which bumps up those costs to 5% or more. Ouch! Do they actually sell any mortgages with that tax liability?

    The Seller fare’s worse with a Closing Cost of 8% (Including brokers commission 6%) of the purchase price. Ouch again.

    On second thoughts, maybe we should stick with what we have.

    This move is clearly blatant electioneering and an attempt to push more of us into property buying thus even more into debt. Government manipulation of any market always ends in disaster. And the tears have yet to be spilt.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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