Johnson considers Stamp Duty switch from buyer to seller

by Property 118

9:27 AM, 15th July 2019
About a month ago

Johnson considers Stamp Duty switch from buyer to seller

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Johnson considers Stamp Duty switch from buyer to seller

Conservative Party leadership contender, Boris Johnson, has confirmed his interest in switching Stamp Duty liability from the house buyer to the seller as proposed by Association of Accounting Technicians (AAT).

Last year Johnson stated Stamp Duty was “absurdly high” and last month he suggested he would consider scrapping it for homes worth £500,000 or less.

Earlier this month, Johnson met with AAT and agreed to examine their Stamp Duty recommendation further, requesting further information which has subsequently been provided.

Phil Hall, AAT Head of Public Policy and Public Affairs, said: “AAT is naturally pleased that Boris has agreed to look at our long-standing proposal to switch Stamp Duty liability from the buyer to the seller. This will save the taxpayer £700m a year by rendering First Time Buyers Relief redundant. It will also protect the £9bn of revenue Stamp Duty generates as it will still be paid in full, simply by different people. It is also much more progressive as it will be paid on the lower priced property being sold rather than the higher priced property being bought.”

The idea certainly appears to have the support of home buyers too.

Tony Richardson and his partner Caroline Danks live with their two young children in a three-bedroom terraced house in Plymouth, Devon. They are now looking at buying a bigger house but have concerns about Stamp Duty costs.

Tony Richardson said: “One of the things that’s made us delay buying a bigger house is the huge amount of upfront costs we will have to face, legal fees, mortgage arrangement fees and the biggest of all, Stamp Duty. That’s why the AAT recommendation to switch Stamp Duty liability is so attractive – it will mean we pay less as we’d only have to pay it on the house we are selling not on the one we are buying. I hope the new Prime Minister, whoever he is, seriously looks at this because it will make a real difference to people like us.”



Comments

R S

15:02 PM, 15th July 2019
About a month ago

But what about older people downsizing and freeing up a large house that can be used by a family? They will be lumbered with a potentially much larger stamp duty bill unless some allowance is made for this sort of situation.

Freda Blogs

16:12 PM, 15th July 2019
About a month ago

Reply to the comment left by R S at 15/07/2019 - 15:02Who would have predicted that buyers would be happy with the proposals??
This proposal may be yet another casualty of ill conceived meddling in the housing sector - with lots of unintended consequences just as the Fees Act, S24 et al.
It may also have more fed up LLs previously uncertain about remaining in the PRS running for the exit to sell before the proposals become enacted.
What about those people (landlords and owner/occupiers) who are highly geared or in negative equity? They may not have the money to pay the stamp duty.
Buyers have a choice about what they can/not afford before they commit to buy. What should sellers do if they can't afford the SDLT? Sit tight? They are already clobbered for CGT.
This is madness in my view.

Jay James

17:10 PM, 15th July 2019
About a month ago

Like almost all most taxes I think SDLT should be abolished. Imagine the administrative costs it would save the public purse.

Ian Narbeth

17:32 PM, 15th July 2019
About a month ago

It has been said that the Seller always pays the stamp duty (now SDLT), meaning that the price achieved reflects the costs the buyer will have. I would like to hear arguments for and against this proposal before making up my mind but I can see the benefit to buyers of not having to find a hefty sum at the same time as paying for surveys, legal fees, removals, new furniture and decoration.
Sellers will actually have the cash.
The Treasury may not like the switch because at present if the buyer does not pay, they "know here you live". If Sellers fail to pay the taxman will have to chase after someone who may have disappeared or be a shell company that is wound up.

R S

17:52 PM, 15th July 2019
About a month ago

Reply to the comment left by Ian Narbeth at 15/07/2019 - 17:32
I think it would become the responsibility of the seller's solicitor to ensure that the stamp duty is paid from the proceeds of the sale upon completion .

AJ

20:20 PM, 15th July 2019
About a month ago

It make a lot of difference when Labour get in, and add CGT on private hose sales.

Mick Roberts

7:57 AM, 16th July 2019
About a month ago

Great,
So for years, the Govt & HMRC has had hundreds of thousands (each Landlord) out of us Landlords, & now they've put that much legislation on us, forcing many of us to now sell, the Govt now says Ooh all these Landlords are selling, let's make the stamp duty payable by sellers now, so we've had the Landlords both ways.

Whiteskifreak Surrey

8:19 AM, 16th July 2019
About a month ago

I am only laughing at those who wanted BoJo for PM and had high hopes he will be good for us LLs! And I guess his fans still believe he will abolish the stamp duty for properties below £500 K? Highly improbable & laughable!!!! Don't forget the GCT much higher than for any other investment! Still love BoJo? I think all of us on that forum already paid stamp duty on all purchases (unless very very cheap property). Now we are going to fork out again... Also for our main residence! So what - are we increasing the selling price to factor in the stamp duty to be paid? Is that going to happen in the market when prices are spiralling down and will spiral even faster after BrexSHIT?
As a general note is probably a high time to sell up everything, exit PRS and exit this country too.

S Somerset

8:56 AM, 16th July 2019
About a month ago

Any idea when this would come in 'IF' it ever does?

We're planning to sell up and move overseas - could be a big hit for us! And the retirees / downsizers as someone else mentioned.

Dylan Morris

10:02 AM, 16th July 2019
About a month ago

Reply to the comment left by S Somerset at 16/07/2019 - 08:56
Boris has got to win first. Unlike all of the media I don’t think this is a forgone conclusion. Of course my crystal ball is no more efficient that anybody else’s but Hunt could just genuinely sneak it in my view, or the vote count will be rigged. Cannot see the authorities will allow Boris to be in charge. We could be in for a massive surprise here.

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