Tax Tip – Stamp Duty and Land Tax

If you are considering buying a house on behalf of your children, perhaps in a town close to a university, you would be well advised to act now.

Last year’s budget provided a reprieve or houses bought for £250,000 or less, so anyone hoping to take advantage of this stamp duty break for first time buyers needs to act fast, as this ends on 25th March 2012.

A property purchase can take up to 3 months to complete for first time buyers.

There are some reasonable loan to value schemes available now but to secure the best deals you may need to make a larger deposit.

In the Autumn Statement documents, the government said: “The government is publishing analysis showing that the stamp duty land tax relief for first-time buyers has been ineffective in increasing the number of first time buyers entering the market.

“This relief will therefore end on 24 March 2012 as planned. The government is instead providing more effective measures which provide better value for money.

The government’s housing strategy, announced earlier in the month, included a mortgage guarantee scheme to encourage lenders to offer 95% mortgages to buyers of new homes

Our view is that Stamp Duty and land Tax should be scrapped altogether as paying stamp duty it is a major disincentive to move house.

The very rich can avoid paying the tax in full using tax strategies.

Why not have a small tax on profits made when selling a house and replace Stamp Duty and land Tax altogether?

What are your thoughts?

If you have any queries abut your buying or selling a house, stamp duty or land tax,  then please do not hesitate in contacting one of our Financial Planning Consultants, at Pareto Lawrence we offer both Financial and tax planning advice to corporate and private clients.

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