Tuesday, 3 December 2013

A smaller profit is not "a huge loss". You twats.

From The Evening Standard:

Research today revealed how the "Stamp Duty Dilemma" forced 14,000 UK homeowners to sell properties at a huge loss last year. The study also shows current stamp duty rates left a further 10,000 homeowners unable to sell their property at all.

The organisation behind the research says the stamp duty threshold, which hits buyers with a £7,500 tax bill when purchasing a home over £250,000, is massively outdated and should be reformed…

The research concludes that rising prices mean 73 per cent of all properties on the market now sit just under the £250,000 threshold — 50,000 more homes will reach it in the next five years.

That "73 per cent... just under... £250,000" suggests they are talking about the London housing market, and nearly everybody selling in London will be selling at a colossal gain. Even if not, the "rising prices" they refer to certainly will*. Not a huge loss.

Naomi Heaton, chief executive of London firm LCP which commissioned the study, said: "When they decide to sell, they will be faced with a very tough decision, the Stamp Duty Dilemma — to sell at up to a £10,000 discount? Or not to sell at all..?"

There's no need for any discount at all, and certainly not one larger than the £7,500 mentioned above - the issue is largely psychological and all the cunning seller has to do is to offer to pay the SDLT for the purchaser, which is perfectly legal and do-able.

So the seller can happily sell for (say) £260,000, and pays the £7,800 SDLT himself, thus netting £252,200 i.e. more than £250,000.

"The first course of action means the homeowner may be treading water when they buy a new property as they are unable to trade up. The second course of action is inaction. Either way, the doors remain firmly closed to first time buyers."

The same logic applies to the next home in the chain; the person who has sold his own home (having paid the SDLT himself) can request the same from the next vendor. Or do his sums properly and take the SDLT on the chin.

As to "the doors remaining firmly closed to first time buyers" this makes naff all difference; if more people were selling houses then they would be an equal increase in the number of people looking to buy houses.

* Of course, there will be some vendors elsewhere in the country who are selling at a loss because prices have fallen - but they get two consolation prizes - the SDLT on their next sale/purchase is smaller and it's cheaper to trade up.


Bayard said...

"Not a huge loss."

It is on expectations. After all houses can only go up, up, up and that original selling price was as good as money in the bank. Now they are getting £10,000 less. That's a huge loss.

Ya gotta see it as the people see it.

Mark Wadsworth said...

B, yes, the same as the current shower say that they are reducing the deficit by simply not increasing it by as much as Labour would have done.

In turn, Labour complain that the Tories are "slashing" public spending, when in truth they are merely increasing it by less than Labour would have done.

Bayard said...

Isn't polspeak wonderful?

Mark Wadsworth said...

B, no it's awful, it is like the sound of a cat scraping its claws over an old aluminium pan.

Lola said...

In my time as a second hand house dealer from Barratts (yes, really) what MW says is exactly what I did, get each person in the chain to make a deal. Yes, I did also have Barratts marketing allowance to help oil the wheels. (PS. Never ever work for Barratts. Awful company to work for).