Stamp duty doesn't tax gains. It's a tax on buyers, not sellers.
It's absolute insanity
It's absolute insanity
Lets say two people are after the same house, both are willing to spend 500k on it.
Person A: Next time buyer, has a budget of 500k after legal/moving costs, that leaves 14200 for stamp duty, and that means you can pay 485,500 (plus 14,275 stamp = 499,775).
Person B is an FTB, they have the same 500k budget but can bid upto 490k due to lower stamp
As such person B can bid 486k, thus offering more than Person A, getting the property.
If both were Next Time Buyers the seller would get 500 less
If both were FTBs the seller would get 4500 more
If there was no stamp duty they would both be able to pay 500k, the seller would get 14k more
Large sales tax on home purchases is probably a generally bad idea. Looks like Bay Area pricing would incur a 10-12% tax under the UK scheme which seems pretty crazy.
It would be far better to replace with a %age tax whether you move or not, but wealthy people in the south east don't like the idea of taxes on unearned wealth.
> it's not a major obstacle for the majority of transactions
You simultaneously call it horrendous and also say it’s not a big deal. What is the point of this except to argue?
It's also a major obstacle in the south east, especially for first time buyers