How the Chancellor’s plan to burden stamp duty to sellers could impact your finances


THE housing market could be in line for a huge boost, with plans to make sellers pay the stamp duty on sales.

Chancellor Sajid Javid outlined the idea yesterday as he pledged to help young people get on the ladder and purchase a home.

 The Government takes £11.9bn in stamp duty every year - the average house price in the UK is £230k and you would pay £2.1k of stamp duty on that

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The Government takes £11.9bn in stamp duty every year – the average house price in the UK is £230k and you would pay £2.1k of stamp duty on thatCredit: Alamy

Currently, house buyers pay the stamp duty, with only first-time purchasers of properties worth less than £300,000 exempt from the duty.

The tax has long been blamed for stifling the housing market.

For buyers, it can add as much as £7,500 to the cost of a £350,000 home.

Mr Javid said he is considering different proposals on stamp duty.

 Chancellor Sajid Javid is considering a new system so that he can help first-time buyers get on the property ladder

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Chancellor Sajid Javid is considering a new system so that he can help first-time buyers get on the property ladderCredit: PA:Press Association

He added: “If you are going to have tax cuts, I think you should always be thinking about the lowest paid.

“I’m looking at various options. I’m a low-tax guy. I want to see simpler taxes.”

But switching the burden to sellers could be painful for those trying to shift their homes in a stuttering economy, as they will be lumbered with paying the whole stamp duty bill.

Here, two couples explain how such a change would affect their finances.

The buyers

ROBERT Warwick, 22, and girlfriend Natalie Justice, 23, live in Canary Wharf, East London, and are keen to get on the housing ladder.

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But despite earning a combined £45,000 they are struggling to save enough for even a starter flat.

 Robert and Natalie want to get onto the housing ladder but they already spend so much on rent, meaning it's hard to save to buy

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Robert and Natalie want to get onto the housing ladder but they already spend so much on rent, meaning it’s hard to save to buyCredit: Louis Wood – The Sun

Robert says: “If Sajid Javid is going to help couples like us then I’m all for it. Cutting stamp duty for people in our position is a great idea.

“I work in recruitment and Natalie works for a digital media company but we worry we will never be able to afford a proper family home.

“We have been looking at one-bedroom flats in London and to get something decent will be at least £350,000.

“So with the stamp duty on that being £7,500 that is a huge chunk out of our budget.

“Even in Colchester in Essex, where we both grew up, one-bedroom flats are going for about £150,000.

“Right now we live in Canary Wharf and are paying £1,600 a month for a one-bedroom flat.

“We are not struggling but about 50 or 60 per cent of our income goes on rent, which is a lot.

“The property market is hugely intimidating and it’s frustrating to think we might not be able to settle down like our parents did.

“We have been together almost six years and have managed to save a bit, but just scraping together enough for a deposit is a huge task in London.

“One day we would like to move outside the city and have a garden that our kids can play in.

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“We both know that by the time  we reach our 30s, having our own home is going to be hugely important so this change could be great news for us.

“Eliminating stamp duty cannot come a moment too   soon.”

Sajid tax flip gets brickbat

SAJID Javid’s radical plan to flip stamp duty costs from buyers to sellers could push up house prices, an expert warns.

The Chancellor is considering “various options” on the tax normally paid when purchasing a home.

But economist Julian Jessop said: “If sellers know they are getting an extra £10,000 tax bill, they will just add it to the price.”

Instead, Jessop urged Javid to concentrate on building houses to make prices more affordable.

The sellers

KAREN and Barry Calvert bought their three-bed house in Cramlington, Northumberland, ten years ago for £178,000.

It is now worth £220,000, so under current rules a buyer would pay two per cent of £95,000, or £1,900. The couple recently tried to sell, but the deal fell through.

 Karen and Barry understand why the new stamp duty would benefit young people but say it's a 'real kick in the teeth' for them

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Karen and Barry understand why the new stamp duty would benefit young people but say it’s a ‘real kick in the teeth’ for themCredit: North News and Pictures

Karen, a 50-year-old PA, says: “Making us pay the stamp duty will definitely make us think twice about selling.

“Paying the stamp duty would be an added cost of almost £2,000 for us, which is a huge amount for an ordinary working family.

“Stamp duty is a constant issue when you are buying or selling a house and the Government keeps changing the cost.

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“It’s changed three times since we bought our first home.

“I can see why this new proposal will benefit first-time buyers. We have two kids in their 20s and if they can benefit from it one day, I’ll tell them to go for it.

“But for people like us it will be a real kick    in the teeth.”

Barry, 56, the head of operations for a car finance company, said: “Stamp duty makes a huge difference mentally when you are trying to buy a new home.

“It’s a huge chunk of money so it can be the difference between a sale going through and the whole thing falling apart, as ours did recently.

“I do worry that passing the costs on to sellers will mean there are fewer homes up for sale and that will have a knock-on effect.

“Older couples often want to downsize when their children move out and that frees up a big house for a family that is expanding. But it’s no good being able to afford a home if the right one is not  for sale.”

Chancellor Sajid Javid unfazed by shrinking UK economy


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