Home sellers should pay stamp duty not buyers, says bank

Home sellers should pay stamp duty not buyers, says bank

19:22 PM, 4th April 2011, About 13 years ago 2

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Landlords selling buy to let property could be hit by a new tax if the government takes up a proposal from a leading bank aimed at making buying a home cheaper.

HSBC wants the government to reverse stamp duty laws and make the tax payable by sellers rather than buyers.

This could cut the purchase price of an average home by at least £1,250 – while putting up the cost on a sale by the same amount.

The reform call follows a study that found 85% of non home-owning young adults under 35 years old want to own a home, but only 16% expect to do so within the next five years.

While almost half (45%) of aspiring home buyers never expect to buy a home.

Stuart Beattie, HSBC’s head of mortgages, said: “Our study proves that the aspiration to be a home owner continues to be exceptionally strong. Over 80% of young non-home owners are aspiring to buy a home but are being prevented from doing so due to lack of affordable homes.

“The key to helping buyers back into the market is to help them obtain the cash deposit that responsible lenders require before granting a mortgage.

“ To this end, both government and private sector interested parties need to come up with innovative schemes to help aspiring home buyers.”

It’s hard to see how the HSBC proposal would affect current first time buyers as they pay zero stamp duty on buying a home valued up to £250,000 until March 24, 2012.

Meanwhile, landlords and other homeowners would bear the brunt of the proposed tax.

With the average home valued at around £165,000 according to most house price surveys, stamp duty would be charged at 1% or £1,650 on a sale on top of any capital gains tax due.

The bank also suggests 95% mortgage lending could come back if insurance cover like the old mortgage indemnity guarantee (MIG) policy was reintroduced.

Under MIG, the buyer paid a one-off policy premium to indemnify a lender from losing money on repossession based on the value of any loan above a set loan-to-value, often 75% of the property purchase price.

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10:47 AM, 5th April 2011, About 13 years ago

I find it wonderful that once again those who have worked hard and saved hard are to be penalised for their efforts. My first home was bought in 1989 by living on baked beans on toast for too long! Then interest rates went sky-rocket and hanging onto our home was a harsh lesson in frugal living.
1. if you expect your first home to cost more than £250k then adjust your aspirations.
2. If my home is being bought by first time buyers who would not have had to pay stamp duty then do I still have to pay it?
This is just the government trying to claw back the relief they have offered to first time buyers. Nothing more.
If I were going to get on my soap box and sound like an old git, I'd say that I'd like to see a few more would be home-owners driving old bangers, pawning the X-box and Wii and missing out on overseas holidays before I could believe that the majority could not save for a deposit over a few years of trying.
Who says everyone has the right to buy at the expense of those who have already done the work. But I'd hate to sound like an old git - so off my soapbox and back to work 🙂

23:20 PM, 28th April 2013, About 11 years ago

RE "I find it wonderful that once again those who have worked hard and saved hard are to be penalised for their efforts."

So nothing to do with a giant housing bubble fueled by irresponsible lending, mass fraud and too low interest rates

The equity people have in their property is down to a ponzi scheme and not hard work

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