Another reason why buying a home here in the UK is a fool's game - up to 4% "stamp tax" every time you buy.
Seriously.
So buy that £500,000 home (you know, a 1-bedroom closet), and you're already down £20,000, plus your estate agent fee and other closing costs, say another £20,000.
All this does is makes people less inclined to move (i.e. afraid to move), as they know buying a new place is gonna hurt on taxes and fees. Which helps freeze up the market, likely helping drive up prices to the crazy point they're at today.
Ah, you gotta love it when government policy distorts a market.
Stamp duty 'hits property market'
Increased stamp duty has made house prices more volatile and reduced property transactions by as much as 500,000, according to research.
Increased stamp duty has made house prices more volatile and reduced property transactions by as much as 500,000, according to research.
The CEBR study concludes: “As property prices rise in relation to incomes, one would expect demand to slacken and the upward pressure on prices to subside.
“But estate agents believe that a key factor currently sustaining house price inflation is that there is a lack of supply of suitable houses.
“Clearly part of the problem is the lack of new build – as a country we have been building about 60,000 fewer properties a year than would be necessary to stabilise the house price average earnings ratio.
“And this has been largely caused – as the Barker review has pointed out – by planning regulations and social housing requirements. But another aspect of the problem is an unwillingness to put existing houses on the market because of stamp duties.
