Stamp Duty : £9,000. Guvmints are evil. FACT.

[Dauphin]

A point should be made however, that most of the Poles coming over aren't in London. Certainly not proportionally so compared to the rest of the country IIRC. Most of the Poles are in the Anglia region.

[Dinner]

Originally posted by Spiffor
How is a 3% tax "punitive"?

My sales tax is 6 times higher than that. And in 2007, Germany will add 3% on all its sales tax (which is already fairly high).

The really punitive thing is the price of property in London. If the prices were somehow connected to reality, the taxes would be pretty small.

Prices are connected to reality in so far as willing buyers are paying those prices. Hard to get more real then that.

[Dauphin]

Replace reality with rationality.

[Dinner]

Reality and rationality are two different things.

[Cort Haus]

I could actually supply some real data here on % of Poles in the labour market and where they are living.

I work with recruitment data and the db I'm working on currently has tons of Poles. They are between five and ten times as many of them as the next bunch of well-represented nationalities, and there is one Pole for every twenty Britons.

[Dinner]

Polish women are hot. The UK needs all of the hot women they can get.

[Cort Haus]

Hmmm, my regional data will be not much good because the sample is dependent on the location of the agencies that use the db, not full national trends.

What is demonstrated, though, is that some of the other towns & cities where the data is from in the South-West have relatively more Poles than in London. Wheras the highest number of their British candidates are from London, they have more Poles in the south-west than they do in London.

Speaking of anecdotal evidence, not all Poles will be going home, or elsewhere. Some meet agreeable English people who they marry, settle down and have families with. I know a couple of Poles who have done this.

[Drogue]

Originally posted by Spiffor
The really punitive thing is the price of property in London. If the prices were somehow connected to reality, the taxes would be pretty small.

Actually, it isn't. Either you ration houses by lottery or you accept that many people are willing to pay inordinate amounts to live near work. More people work in London than live there, so prices are huge.

Originally posted by Krill
House prices are about double what they were 4 years ago though, and no change in Stamp duty thresholds. So this really is nothing but the gov'mint being greedy.

Firstly, only in London. And secondly, why should the government change tax rates because prices change? It's inflation, 3% on a £300,000 house is the same as 3% on the same much cheaper house earlier.

Originally posted by Spiffor
I think this kind of inflation is much more "punitive" than a tax. Especially a tax that is 5 times smaller than the average VAT.

No it isn't. There's a *huge* difference on a sales tax and a value added tax. The value the last owner added to the house is probably 0.

Originally posted by Dauphin
Anyone know what the actual effect of tax is, rather than wild speculation? i.e Who suffers more in economic terms, the buyer or the seller. Does it depend on market conditions (e.g bull vs bear)? etc etc.

Not on those market conditions, it depends on elasticity. The more elastic a market, the more the burden falls on the seller. Ie. if people have to buy something, then taxes take little off demand and the buyer pays. If people easily choose not to consume it, then taxes reduce demand hugely and the tax falls upon the seller, who cuts prices to avoid the huge demand fall.

Originally posted by Dauphin
Replace reality with rationality.

House prices are rising quickly, the market is perpetuated by high salaries, investors buying more and more property and city workers being able to afford to live there. It may be not for the long term, but it is rational.

[Dauphin]

Originally posted by Drogue
Not on those market conditions, it depends on elasticity. The more elastic a market, the more the burden falls on the seller. Ie. if people have to buy something, then taxes take little off demand and the buyer pays. If people easily choose not to consume it, then taxes reduce demand hugely and the tax falls upon the seller, who cuts prices to avoid the huge demand fall.

You realise that your definition of elasticity sounds a lot like a bull and bear market.....

It's inflation, 3% on a £300,000 house is the same as 3% on the same much cheaper house earlier.

Why then does the government increase the personal allowance, CGT, inheritance tax etc (often in line with inflation)? And have you never heard of fiscal drag either. Not increasing thresholds is effectively the same as decreasing the thresholds in real terms.

[Provost Harrison]

Originally posted by Spiffor

Governments can actually do something about prices, even in a free market. The mechanism is not to forcibly set a price. But it is to weigh on supply and demand.

For example, your government could raise the height-limit on buildings in London, and you'll get plnety of new flats built in inner London in little time, by private investors.

The government could also have a voluntary policy of building council housing and student's housing (publicly), so that there isn't as much demand-pressure.

Another possibility, the government might use its sway to develop non-London cities and making them attractive, so that some of the excess population from greater London goes north, thus further alleviating the demand-pressure.

There are plenty of ways for property prices not to be ridiculous, even in a market economy where private actors freely set their price.

But a proportional tax of 3% isn't punitive. Or more accurately, it is only punitive when you're buying something of vital necessity whose market price is punitive already. In this case, it's more urgent to fix the market rather than the tax.

It is very likely that your flat's market value will increase by more than £9000 pounds in the near future anyway. Housing prices have grown by 15% in "prime london" these past twelve monthes. If they grow at the same rate, these £9,000 are what you'll pay extra if you buy your flat in February.
I think this kind of inflation is much more "punitive" than a tax. Especially a tax that is 5 times smaller than the average VAT.

The government has done this on a lot of taxes (similar goes for inheritance tax with there being no change in the threshold compared to property value). And the fact that properties are not being built quickly enough and the problem has been addressed in a half-arsed manner. Methinks this is rather convenient. But I can't afford to buy a place and I wish that more building projects were going ahead. Instead they get bogged down in bureaucracy and scandal (my council being a prime bloody example of this). Never mind a f**king olympic venue - they should have used the land and the money far more effectively!

[MOBIUS]

I'm sorry, what's stamp duty...?

I'm in the process of buying a two bed flat with garden and garage right in the centre of town and my stamp duty bill is a big fat £0.

[Krill]

That's cos you live in Wales, and nobody EVER wants to live in Wales if they can help it.

[Cort Haus]

- and what kind of self-respecting town centre has garages and gardens?

Sounds suspiciously suburban to me.

[MOBIUS]

You mark my words, Cardiff is going to be well and truly on the map in the next few years!

As for suburban, I doubt being within about 200-300 yards of the Millennium Stadium is suburban by anyone's standard...

[Cort Haus]

Hmm, impressive. Though - you can live within a few hundred yards of the New Wembley Stadium but still have the stigma of living in Neasden.

Anyway, why no stamp duty, Mobius?