Reform Stamp Duty on house purchases

Proposer
Floppy
State

Accepted

Vote Score

2

Age

2082 days


@Floppy edited economy.md - over 5 years ago

Income Tax

The personal income tax allowance will be set at the level of a full time living wage (currently £14,458.50 based on 252 working days of 7.5 hours per day at £7.65) and will rise inline with the living wage.

The personal income tax allowance will be set at the level of a full time living wage (currently £14,458.50 based on 252 working days of 7.5 hours per day at £7.65) and will rise inline with the living wage.

Housing

Stamp Duty on house purchases should be reformed, with purchases tax-free below the 1.5x the national average house price, and a flat 3% tax applied on the amount above that threshold. This is broadly in line with the recommendations from Stamp Duty Reform UK, except that the threshold is not a fixed number, but is based on the housing market, thus keeping the lower end of the market tax-free in perpetuity.

Floppy

@Floppy - over 5 years ago

1.5x the average house price is currently around £240,000.

PaulJRobinson

@PaulJRobinson - over 5 years ago

I like the idea of thresholds that increases alongside average rising prices. Why a single fixed rate though? The current system of multiple rates and thresholds mean an individual buying a property over £2million pays 7% (and if a corporation was to do the same it would be 15%) https://www.gov.uk/stamp-duty-land-tax-rates. I think those who are purchasing immense houses, who have the ability to pay, should make a greater contribution.

with kind regards, Paul Robinson

about.me/pauljrobinson

On 8 January 2014 12:55, James Smith [email protected] wrote:

1.5x the average house price is currently around £240,000.

You can merge this Pull Request by running

git pull https://github.com/openpolitics/manifesto stamp-duty

Or view, comment on, or merge it at:

https://github.com/openpolitics/manifesto/pull/43 Commit Summary - Stamp duty reform

File Changes - M economy.mdhttps://github.com/openpolitics/manifesto/pull/43/files#diff-0(6)

Patch Links: - https://github.com/openpolitics/manifesto/pull/43.patch - https://github.com/openpolitics/manifesto/pull/43.diff

— Reply to this email directly or view it on GitHubhttps://github.com/openpolitics/manifesto/pull/43 .

PaulJRobinson

@PaulJRobinson - over 5 years ago

I also agree that it shouldn't be levied until you are purchasing a house at least 1.5x the regional average (rather than national average - almost every single bedroom flat purchaser across London would be caught with a £240,000 threshold).

with kind regards, Paul Robinson

about.me/pauljrobinson

On 8 January 2014 13:35, Paul Robinson [email protected] wrote:

I like the idea of thresholds that increases alongside average rising prices. Why a single fixed rate though? The current system of multiple rates and thresholds mean an individual buying a property over £2million pays 7% (and if a corporation was to do the same it would be 15%) https://www.gov.uk/stamp-duty-land-tax-rates. I think those who are purchasing immense houses, who have the ability to pay, should make a greater contribution.

with kind regards, Paul Robinson

about.me/pauljrobinson

On 8 January 2014 12:55, James Smith [email protected] wrote:

1.5x the average house price is currently around £240,000.

You can merge this Pull Request by running

git pull https://github.com/openpolitics/manifesto stamp-duty

Or view, comment on, or merge it at:

https://github.com/openpolitics/manifesto/pull/43 Commit Summary - Stamp duty reform

File Changes - M economy.mdhttps://github.com/openpolitics/manifesto/pull/43/files#diff-0(6)

Patch Links: - https://github.com/openpolitics/manifesto/pull/43.patch - https://github.com/openpolitics/manifesto/pull/43.diff

— Reply to this email directly or view it on GitHubhttps://github.com/openpolitics/manifesto/pull/43 .

Floppy

@Floppy - over 5 years ago

Yes, OK, regional average seems better, and I'm also in favour of banded increases, as long as the bands are applied progressively, not in a single lump as now.

PaulJRobinson

@PaulJRobinson - over 5 years ago

Sorry James I don't quite follow: under the current system the rate paid increases as the purchase price increases. Is that not what is meant by being progressive? Could you explain what you mean by 'single lump'?

with kind regards, Paul Robinson

about.me/pauljrobinson

On 8 January 2014 13:40, James Smith [email protected] wrote:

Yes, OK, regional average seems better, and I'm also in favour of banded increases, as long as the bands are applied progressively, not in a single lump as now.

— Reply to this email directly or view it on GitHubhttps://github.com/openpolitics/manifesto/pull/43#issuecomment-31831337 .

Floppy

@Floppy - over 5 years ago

Sorry, Currently, under stamp duty, you pay 3% on the WHOLE AMOUNT once the price goes over 250k (or whatever other threshold). It would be more sensible to only apply it on the amount over that threshold, as with income tax.

PaulJRobinson

@PaulJRobinson - over 5 years ago

That would mean someone purchasing (for example) a £2 million property would actually pay less under a progressive system as you describe above, even if the rates and thresholds remained the same as today. So under the current system anyone paying £2,000,000 for a house pays £140,000 in stamp duty (entire amount at 7%). If one paid the bill as you describe above they would pay almost half the amount £78,749.92 (1249.99+7499.9+19999.96+50000).

But as you suggest it does has a similar advantage for those at the bottom end of the market who would pay very little.

with kind regards, Paul Robinson

about.me/pauljrobinson

On 8 January 2014 13:55, James Smith [email protected] wrote:

Sorry, Currently, under stamp duty, you pay 3% on the WHOLE AMOUNT once the price goes over 250k (or whatever other threshold). It would be more sensible to only apply it on the amount over that threshold, as with income tax.

— Reply to this email directly or view it on GitHubhttps://github.com/openpolitics/manifesto/pull/43#issuecomment-31832470 .

Floppy

@Floppy - over 5 years ago

The advantage is that it removes the market distortion around the thresholds, which are a big annoyance for home buyers. Yes, if the bands stayed the same, it would reduce slightly the tax burden overall, but the bands could be tweaked to keep it the same if we care. Best thing might be to set out the policy of having banded tax, applied progressively, with bands based on average regional prices, without actually having the bands themselves defined yet.

PaulJRobinson

@PaulJRobinson - over 5 years ago

👍 to all the above (stamp duty rising with prices; starting at 1.5x regional average; rates paid progressively only on the amounts over and above each threshold)

with kind regards, Paul Robinson

about.me/pauljrobinson

On 8 January 2014 14:24, James Smith [email protected] wrote:

The advantage is that it removes the market distortion around the thresholds, which are a big annoyance for home buyers. Yes, if the bands stayed the same, it would reduce slightly the tax burden overall, but the bands could be tweaked to keep it the same if we care. Best thing might be to set out the policy of having banded tax, applied progressively, with bands based on average regional prices, without actually having the bands themselves defined yet.

— Reply to this email directly or view it on GitHubhttps://github.com/openpolitics/manifesto/pull/43#issuecomment-31835339 .

@Floppy edited economy.md - over 5 years ago

Income Tax

The personal income tax allowance will be set at the level of a full time living wage (currently £14,458.50 based on 252 working days of 7.5 hours per day at £7.65) and will rise inline with the living wage.

The personal income tax allowance will be set at the level of a full time living wage (currently £14,458.50 based on 252 working days of 7.5 hours per day at £7.65) and will rise inline with the living wage.

Housing

Stamp Duty Land Tax (paid on house purchases) should be reformed, with tax band thresholds based on the regional average house price. Purchases up to the regional average price should be zero-rated. In addition, the 'slab' approach of current taxation will be changed to an incremental approach, where only the amount above a threshold is taxed at that rate.

Floppy

@Floppy - over 5 years ago

OK, changed some things. Bands are unspecified; only specification is that amounts up to regional average are untaxed. Beyond that, it's all up for later decision. Made slab vs incremental aspect clearer (I hope).

@Floppy edited economy.md - over 5 years ago

Income Tax

The personal income tax allowance will be set at the level of a full time living wage (currently £14,458.50 based on 252 working days of 7.5 hours per day at £7.65) and will rise inline with the living wage.

The personal income tax allowance will be set at the level of a full time living wage (currently £14,458.50 based on 252 working days of 7.5 hours per day at £7.65) and will rise inline with the living wage.

Housing

Stamp Duty Land Tax (paid on house purchases) should be reformed, with tax band thresholds linked to the regional average house price. Purchases up to the regional average house price should be zero-rated. In addition, the 'slab' approach of current taxation will be changed to an incremental approach, where only the amount above a threshold is taxed at that rate.

PaulJRobinson

@PaulJRobinson - over 5 years ago

👍

with kind regards, Paul Robinson

about.me/pauljrobinson

On 8 January 2014 18:26, philipjohn [email protected] wrote:

[image: 👍]

— Reply to this email directly or view it on GitHubhttps://github.com/openpolitics/manifesto/pull/43#issuecomment-31862793 .