Stamp duty

luckat

Hmm, so Bertie's going to get rid of stamp duty *for first-time buyers*.

So if you're trading down you still get hit with massive stamp duty, and if you're selling and trading up marginally, you do too. Not so clever.

I work with someone who wanted to move house to give his kids access to better schools but he couldn't afford to because of the stamp duty hit. I'd like to trade down to a smaller place with fewer rooms, but can't do it, because of the stamp duty hit.

The first-time-buyers limit just means the price of houses at the bottom of the market is going to rise hugely. What a pity.

gurramok

The stamp duty abolishing for FTB's is a red herring policy as it will not affect majority of FTB's financial circumstances.
I doubt prices will rise this time around, maybe by wishful thinking sellers.

The central issue is affordability for those FTB's, those that can afford over 317k for a 'starter' home will benefit but there ain't many around.
Plus the revenue from FTB's is paltry, sub €70m last i heard. If they reduced stamp duty for everyone else, they will have to claw back the money from somewhere.
I agree with you on the trading down thing. My own mother is in same position, unable to maintain a sizeable 3 bed terrace where older children have moved out, she cannot afford circa 15k stamp duty as she is a pensioner.

That trading down rule as the greens have proposed to amend needs reformation asap.

luckat

And even if you're hard-hearted and forget about the cost of maintaining a big house on a pension, what about the point of releasing a three- or four-bedroom house for a family, while a single person can relocate to a place with fewer rooms?

It's a mad, antisocial policy.

There should be no stamp duty on a trading-down buy; stamp duty generally should be graded, rather than going up in steps. In other words, you should pay so much on the first so many thousands, then the next rate on the next few thousand, and so on.

Was just in France, and people there tell me that it's no more than €10,000 or so on buying a normally priced home.

Firetrap

It'll help some people, mainly of the trading up/trading down variety but it's far from being the saviour of the property market it's being heralded as by some. I'm led to believe that certain journalists who campaigned heavily for the removal of stamp duty were having trouble selling property they owned themselves. Say no more.

FF have been led kicking and screaming into reforming stamp duty. It's a lovely easy source of income for the exchequer and something that's fairly unavoidable. That it'll help FTBs is a load of cobblers. Most FTBs won't get the colour of 317 grand when they go looking for a mortgage. Tis ridiculous money to be paying just to put a roof over your head IMHO

Glenbhoy

Well luckat you can actually buy a new build, because regardless of your status, as long as you're the owner occupier, you don't pay stamp duty. It's stange one admittedly, I for one can't see why the govt would be making one type of property more desireable than another - some would think that perhaps the builders have something on them, i wouldn't of course....

bonkey

luckat wrote:

There should be no stamp duty on a trading-down buy;

When you say "trading down", do you mean "down in size", "down in price", or both?

luckat

I meant down in price.

Was just talking to someone in Japan who had priced a good-sized two-bedroom two-reception apartment at around €100,000 - this is in the suburbs of Tokyo. "I can't understand why anyone would live in Dublin" was the response to my descriptions of prices here.

bonkey

luckat wrote:

I meant down in price.

I see.

So the argument about "freeing up" bigger places is a red herring then, cause you could be buying a bigger residence, but by moving area you get it for less.

I'm also wondering how someone cannot afford to pay stamp duty despite making a profit on the trade.

luckat

People aren't going to move if it's going to make a huge hole in what is - for many - their pension in bricks-and-mortar form.

Freeing (or as you put it, 'freeing up') a bigger place is not, of course, a consideration for the vendor; it should be one for the government, however.

bonkey

luckat wrote:

People aren't going to move if it's going to make a huge hole in what is - for many - their pension in bricks-and-mortar form.

If your pension is the value of what is in bricks and mortar, then trading down creates that huge hole. All the government are doing with stamp-duty in that situation is taking a chunk of the value which is no longer invested in bricks and mortar, but which has been turned into cash instead.

Sure...for some people, they want to trade down to have a smaller mortgage. But for others, they trade down to cash-in on the value increase of their current property.

Don't get my position wrong...I'm not suggesting for a second that I support the government's policy. Rather, what I'm saying is that most people's view on stamp duty seems to be structured around an argument which can be summarised as :

"I don't want to pay it. However, thats not a good argument, so I need to describe a more general situation which would be in the public interest and would get me / have gotten me out of paying it in my situation."

People selling a house to buy a cheaper one, in my opinion, are not a sufficiently well-defined group to argue they should get exemptions. The argument that some of them are in a situation where stamp-duty makes it prohibitive (as opposed to unattractive) as an option simply re-inforces my opinion. It shows that there is a case that some people in that situation should arguably be exempted, not all.

Cherry-picking cases to fit a broader description serves no-one as both supporters and opponents of a system can engage in it. Just as you can argue that you or someone you know sadly has been inconvenienced in not being able to downvalue, it can equally be argued that the person who bought a house prior to the boom and now wants to cash it in for a staggering profit so they can then pay off their cheap mortgage and then buy outright a cheaper house elsewhere does not deserve to be exempt.

Both are people "trading down" as fas as it has been defined....and I would maintain that there is little reason to feel that the person who's making a fortune needs the government making their life even cushier.

Freeing (or as you put it, 'freeing up') a bigger place is not, of course, a consideration for the vendor; it should be one for the government, however.

When I asked if we were talking about trading down in size or in value, you told me it was the latter you were talking about. I asked because at least one post suggested that downsizing should be taken into account, whilst other posts seemed to be suggesting that "trading down" was value-related.

I wasn't suggesting that it is or is not a good argument....merely that if what we're discussing is downvaluing as you've clarified, then downsizing doesn't enter into it.

silverharp

bonkey wrote:

I see.

I'm also wondering how someone cannot afford to pay stamp duty despite making a profit on the trade.

its only a profit, if you are cashing out.

Fratton Fred

The last thing this country needs is a kick start to the housing market. The best bet, in my opinio, is to leave things as they are and hope the market stays as it is for the nest 8 years so that wages can catch up.

Another rise in property values could lead to a crash and negative equity which would bugger the entire economy.

bonkey

silverharp wrote:

its only a profit, if you are cashing out.

Then its only a loss if you're cashing out either.

If you don't cash out when trading down in value, then you either reduce the duration or the monthly repayment of your mortgage. In such a case, stamp duty will reduce it by less, cause it to not be reduced, or - in a worst case - mean that there's a net increase.

If its only profit when you cash out, then this isn't a loss.

silverharp

Here are some observations from where I live. I bought a 3 bedroom house way back when you could buy a house for a bag of beans. Because the house prices went up so much and we wanted/needed a bigger house, cos of stamp duty we extended the house, so now purely because of stamp duty there is a 4 bedroom house where there used to be a 3 bedroom house (a benign tax shouldn’t distort market transactions)
Now thinking about schools for kids and the one we want is 4 miles away, again if stamp duty was nominal we would move to the area, instead our freedom has been restricted by the tax. And in theory if the best job in the world came up outside Dublin, again would have to turn it down as it would cost too much move (affects labour mobility)

Fatty

I bought a place in Jan 07. As a first time buyer myself and my partner paid 32K Stamp Duty!! We bought on the basis of a statement by the minister of finance stating that there would be absolutely no change in stamp duty policy

Then Whad'Ya Know? ..weeks later there is a total change in stamp duty policy!!! thats basically done us out of 32K

I'm considering a legal challenge against the government over this action.
anyone in a similar position???..possible group challenge?

Cheers

Fats

stovelid

Fatty wrote:

I bought a place in Jan 07. As a first time buyer myself and my partner paid 32K Stamp Duty!! We bought on the basis of a statement by the minister of finance stating that there would be absolutely no change in stamp duty policys

No offense but you chose to pay 32K on the basis of a statement from a politician facing reelection. In a buyer's market that was virtually stagnant....

I'm no legal expert but I doubt you can take court cases to compensate property speculation made on the basis of political hearsay.


Like the other posters said; the stamp duty thing is a red herring for most FTBs but I agree with FF, the last thing we need is anything that tries to correct the market upwards.

The 'medicine' re: slump should just be taken and learned from TBH.

Glenbhoy

Fatty wrote:

I bought a place in Jan 07. As a first time buyer myself and my partner paid 32K Stamp Duty!! We bought on the basis of a statement by the minister of finance stating that there would be absolutely no change in stamp duty policy

Then Whad'Ya Know? ..weeks later there is a total change in stamp duty policy!!! thats basically done us out of 32K

I'm considering a legal challenge against the government over this action.
anyone in a similar position???..possible group challenge?

Cheers

Fats

May not have affected you with the house you ended up buying anyway - is the cut-off not supposed to be 450K - anyway, the legislation will only be changed if FF get in, and their coalition partners agree with it.
The other thing is that since so few people bought property in the period from Sept 06 to present, then you are one of very, very few people to be affected by the change.
Tbh, if I were you, I'd be equally as worried by the probable fall in value of your property by approx 10% this year (if current trends continue, and there's every indication they will - stamp duty reform or not). Anyway, as someone else said, it's only a loss if you move, so hopefully you'll be alright. Good luck.

Fatty

stovelid wrote:

No offense but you chose to pay 32K on the basis of a statement from a politician facing reelection. In a buyer's market that was virtually stagnant....

I'm no legal expert but I doubt you can take court cases to compensate property speculation made on the basis of political hearsay.


Like the other posters said; the stamp duty thing is a red herring for most FTBs but I agree with FF, the last thing we need is anything that tries to correct the market upwards.

The 'medicine' re: slump should just be taken and learned from TBH.

The market was not really stagnant or a buyers market at the time. A statement from the Minister of Finance is not generally regarded as hearsay. A politition looking for re-election would give a hint that there would be changes, not freak out at the last minute and abolish stamp duty in order to gain votes.

bonkey

Fatty wrote:

A statement from the Minister of Finance is not generally regarded as hearsay.

A statement from any government official coming up to an election should be considered as worse than hearsay.

If the existing government and/or the official in question do not get back into power, his statement is worth nothing as neither he nor they are making future policy.

If they and he do get back into power, his statement should be considered as no more than an election promise.

If you haven't learned by this point in your life that an election promise is something thats said to keep an electorate onside until after the vote has been cast, then hopefully 32K is sufficient for you to remember it for the rest of your days.

If the minister said the same post-election, but before a working government was up and running, I'd still consider it a worthless comment, as who knows what deals will be struck to form a government.

Sure...once the government is up and running, and there's no major crises on the horizon....then you can have a degree of confidence in some stuff that the government says...but again, its only a degree of confidence.

I feel bad for you, but as a matter of interest...who do you think should be refunded, or do you not care as long as you're included? I mean...no matter where you draw the line, there'll be someone somewhere who signed their contract less then 24 hours before the cutoff, and they'll feel aggrieved that one day has cost them X thousand where you are arguing for leniency in a case of weeks.

Wherever the line is drawn, someone will feel cheated. Solution? Don't draw lines. You paid your stamp duty because that was the law when you decided to sign your contract, and you were (obviously) willing to accept the deal with those conditions.

This reminds me somewhat of people who cried a river when their Eircom shares tanked. If you don't know how the game is played, and don't know you don't know, then expect to learn the expensive way.

stovelid

Fatty wrote:

The market was not really stagnant or a buyers market at the time.

6 months ago? What market are you talking about, the UK?

I wasn't having a go, just saying a legal case probably won't be feasible given that you went ahead of your own free will and took the SD hit, factoring in political promises so close to an election.

TBH, I don't see promises made in election year as having more weight because they are ministerial but maybe I'm just a cynic.

Look to the taxi drivers. They also bet on governmental policy and they have - thankfully - had zero luck in being compensated for what is basically speculation undertaken of their own free will.

You had the + 32K to pay if you went ahead with the sale so are not really in the sh*t creek position of others who, say, can't sell or buy because of SD.

Anyway, as another poster said, if the duty thresholds are revised, you may benefit?

Good luck whatever happens.

Fatty

stovelid wrote:

6 months ago? What market are you talking about, the UK?

The average price paid for a house in Dublin and outside Dublin in March 2007 was EUR 429,151 and EUR 265,767 respectively. The equivalent prices in December 2006 were EUR 427,343 and EUR266,339.

Measured over the past 12 months (up to and including March), the average price pay for a house in Ireland was still 7.4% higher in March 2007 than the average price paid in March 2006.

Some houses that sold in december 2006 got way over asking price. My point is, that there may have been a slowdown, but no buyers market. The bigger picture predicted growth in 2007. It's easy to use heinsight when it comes to this subject. I really believe that no one can perdict the property market. There are too many variables involved.


Bonkey: it's not as black and white as you put it. It appeared at the time that the party most likely to win was adamant that it was not going to change policy on Stamp duty. They made no promise to abolish it at all, in and after the Dec 06 budget. Then to u-turn on this decition was totally misleading and unfair to first time buyers. I'm not a share dealer (eircom) or property speculator or owner. Everyone has the right to a home without being totally screwed. besides, everyone knows it's not a fair or legitimate tax. Yes, you can say tough ****e, but it is pretty tough and ****e too:rolleyes:

Glenbhoy

Fatty wrote:

Everyone has the right to a home without being totally screwed. besides, everyone knows it's not a fair or legitimate tax.

Everyone has a right to a home - possibly, but you don't have to own a home, that would be the decision you made yourself.
Everyone knows it's not a fair or legitimate tax - why? Just because the Sindo says it's not, doesn't mean that it's not fair or legitimate (would every tax applied by the government not have to be legitimate, given that out legislative body enacted it?).

stovelid

Like I said, it's regrettable that you paid the SD but you chose to do this 6 months shy of a general election where SD was shaping up to be an election issue.

A 'buyer's market' = that there are plenty of properties for sale, more coming on to the market, and further price drops predicted. In that context, it's up to the person themselves if they want to take a chance buying a house that is subject to SD.

Sorry about using 'speculation' vaguely. I meant that you speculated - took a chance - on stamp duty staying the way it was. Not that you were a property developer or multi-speculator.

I'm not crowing by the way. I bought nearly 2 years ago and now wish I had waited a few more years. I don't plan legal action against anybody because nobody forced me to buy a house.

bonkey

Fatty wrote:

Bonkey: it's not as black and white as you put it.

I disagree.

You put faith in a non-binding statement from a politician who was making a comment on a future situation.

You have no comeback whatsoever. You're owed nothing.

You can feel disappointed in said politician and his party and come the next election you can use that as a factor in deciding who you vote for. Thats about the limit of it.

It appeared at the time that the party most likely to win was adamant that it was not going to change policy on Stamp duty.

So what you're saying is that it was a statement made coming into an election which they wanted the electorate to put faith in. Thats what they call an election promise, and its not worth the paper it isn't written on.

Then to u-turn on this decition was totally misleading and unfair to first time buyers.

Then make sure you remember this come next election, and vote against them. Thats the limit of what you can do.

Everyone has the right to a home without being totally screwed.

Hold on one sec.

You have your home. You are not being denied that.

What you're complaining about is that you feel you paid more than you might have had to if you held out a little while longer. If you are being totally screwed, its a screwing that you agreed to when you signed the mortgage.

What you're complaining about is that its a screwing you mightn't have had to have.

I didn't see you on here complaining before you bought the house that you were being screwed. Your complaint materialised when you discovered that waiting could have saved you money you had already proved willing to pay.

besides, everyone knows it's not a fair or legitimate tax.

But you decided to pay it anyway. Your complaint is apparently that other people may not have to pay it.

Yes, you can say tough ****e, but it is pretty tough and ****e too

You lost out. Of course thats tough on you. Of course you think thats ****e.

That doesn't make your point any more valid. If the housing market crashes in the next year, and you end up with massive negative equity, that too will be tough and ****e, but like your current situation, you will be where you are as a result of your own freely-made choice. It won't matter if the Finance Minister has assured us there is no crash coming, nor anyone else. You will have no comeback.

This is how the game is played. These are the risks and costs you accept when you get into the game.

Victor

Fatty, realise that if all else stays the same, removing or reducing stamp duty increase the value of your home.

Fatty

bonkey wrote:

So what you're saying is that it was a statement made coming into an election which they wanted the electorate to put faith in. Thats what they call an election promise, and its not worth the paper it isn't written on.

Bonkey you swiss muppet, a statement such as this, is not an election promise. Even if it was, it's not a vote winner, quite the opposite. that was my point there.

Do you even live or work here? or are you ranting from some shack in Bern. Pull that Toblerone out ur ass brother.

bonkey

Fine. Its not an election promise.

The rest of my point still stands : You put faith in a non-binding statement from a politician who was making a comment on a future situation.

You have no comeback. You are owed nothing.

And I'm not your brother.

Fatty

Fatty wrote:

Bonkey you swiss muppet, a statement such as this, is not an election promise. Even if it was, it's not a vote winner, quite the opposite. that was my point there.

Do you even live or work here? or are you ranting from some shack in Bern. Pull that Toblerone out ur ass brother.

I was going to give you a months ban for that .
But because you made me laugh,lets make it 29 days,23 hours and 60 minutes.

wedfan

Hi everyone,

Myself and my partner are buying a second hand house together and hope to move in next week. My partner is a first time buyer but i am not. We have to pay about 23K in stamp duty. Do u think that we will get any of it back? I dont think its fair on my boyfriend to have to pay stamp duty just because i had a house before. I have no problem paying stamp duty on my part of the house.

Any advice would be appreciated.

Many thanks
Wedfan

Glenbhoy

Wedfan you'd be better off posting your question on www.askaboutmoney.com, however, I'll give it a go:
1. As stamp duty legislation currently stands, stamp duty will be payable as normal on the purchase.
2. Depending on which government (if any) take power tomorrow the situation may change radically - we don't know the details of the new legislation however.
3. FF have promised to backdate any changes to April 30th (although, I also saw April 1st being mentioned).
4. You mentioned you are not a FTB - why not? The reason I ask is because there may be specific reliefs for divorcees - but again that's speculation.

All in all, as things stand you will have to pay the 23K and there's no avoiding that, presuming both names must go on the deeds - you may cut a lucky break with the new legislation and get a refund of whatever you pay, but imo that won't happen - you'll just have to wait and see.