The Boiling Frog: 3%

Friday, 22 June 2012

3%

As regular readers know I'm in the process of trying to move house. Despite being in an area of the South East where house prices have generally held up, as demonstrated by the rapid increase of new builds in my area, the market in my case is somewhat slow - and for one good reason, according to my feedback from estate agents - fucking stamp duty.

Now, I'm not moving house because I want to nor necessarily for profit - I love my current house - it's a necessity. Sadly Mrs TBF is struggling, due to health reasons to make the stairs and very soon it will no longer be an option. A move to a single story property is therefore essential.

The difficulty is my house comes over the £250,000 (3%) threshold but not worth enough not to be a problem. Wonderful. That results in potential buyers being very reluctant to pay the significant duty increase in order to purchase my house - thus stalemate. This has ultimately distorted the market - making my house too cheap or too expensive. There are, of course, ways of navigating around this which unintentionally puts me into more murky territory than Jimmy Carr, through no fault of my own. Thus I couldn't agree with Martin Lewis more:

I hate stamp duty. It’s not that I object to a tax on purchasing property. It’s this distortive tax that has absurd cliff hangers meaning an extra penny on a house’s price can cost thousands.

So when Osborne talks about more aggressive measures on stamp duty avoidance in a populist attempt to clamp down on the rich using loopholes there seems to be silence when it comes to those who aren't so well off and are forced to 'avoid the tax' as a necessity. And at the same time he wants to try to promote a strategy for growth - not moving because of 3% surely equals 0%?

He hasn't a clue.

7 comments:

Anonymous22 June 2012 at 20:48
Have you investigated the possibility of a through-floor lift? Before my wife became completely wheelchair bound, we investigated the options, and getting adaptations done turned to be cheaper than moving from a semi to a vaguely comparable bungalow would have been.
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William22 June 2012 at 20:57
How about a house swap?
There might be someone out there in a similar position to you but in reverse as it were.
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wiggiatlarge23 June 2012 at 10:22
I am in exactly the same position only the next band up, I also need to move for the same reasons as you, stamp duty also causes a conflict of interest in the properties value as all estate agents want to sell and they will push even after valuing above the threshold to have you accept a lower price and come in under the threshold meaning you potentially lose thousands simply to facilitate a sale , obviously all properties in your bracket do not not stop at 249.999 so anything over that and it can be quite a sum is expected to be waived so that a sale goes through.
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DeeDee9923 June 2012 at 10:23
BF - also living in the SE, I sympathise with your situation. The fact is, Stamp Duty as it is currently levied, is a tax that impacts far more on us southerners than many other parts of the country simply because house prices here are so much higher.

May I suggest you deny The Chancellor your money, as well as the Estate Agent, and instead invest in a Stannah Stairlift.

Successive Governments' greed in over taxing household mobility is having exactly the same effect as their greed in overtaxing petrol - it is killing the economy.
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TheBoilingFrog23 June 2012 at 13:49
@Anon, Thanks, we did consider that and other solutions, however it's not just the stairs, but whole host of other potential problems - access to the car, the garden, wider doors needed etc. An opportunity arose for a new build where we could get all the adaptations in place rather cheaply so we thought we'd go for it...just selling mine is proving to be the problematic bit :-(

@Williams, thanks not considered that, will have a look into it.

@wiggiatlarge Exactly, and dead right about estate agents...

@DeeDee99 Re: Stannah Stairlift see my answer to Anon. Agree with your other points...too many in Government don't live in the real world - our own Chancellor has never had a proper job...so no wonder he has little comprehension of how 'us folk out here live'. We're in a double dip recession for a reason - and it ain't the Eurozone crisis
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Edward Spalton25 June 2012 at 13:17
I hope that you are able to find a buyer soon and best wishes to Mrs TBF too.

Dee Dee

Stannah stairlifts can help with senior moments too. They have just brought out a high speed model which will get you to the top of the stairs before you have forgotten why you went there.
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TheBoilingFrog25 June 2012 at 14:13
Thanks Edward Spalton, your comment is much appreciated. See you soon ;-)
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EU quotes

"[There's no way Britain could accept that] the most vital economic forces of this country should be handed over to an authority that is utterly undemocratic and is responsible to nobody"
(British Prime Minister Clement Attlee in response to the Schuman Plan 1950)

"Parliament must...resign itself to becoming a rubber stamp."
(Lord Kilmuir, advice to Edward Heath, December 1960)

"We should frankly recognise this surrender of sovereignty and its purpose."
(Edward Heath, Hansard, 17 November 1966)

“America would welcome it if Britain should apply for full membership in the [EEC], explicitly recognising that the Rome treaty was not merely a static document but a process leading towards political unification.”
(George Ball Under-Secretary of State for JFK 1961)

"The single market was the theme of the Eighties; the single currency was the theme of the Nineties; we must now face the difficult task of moving towards a single economy, a single political unity".
(Romano Prodi, 13 April 1999)

"Let's imagine Europe is a football club and you join, but once you're in it you can't say let's play rugby". (French foreign minister Laurent Fabius)

"We perform the duties of freemen; we must have the privileges of freemen ..."
(Chartists 1836)

"The [Lisbon Treaty] is indeed a tidying -up exercise, it sweeps the rest of our sovereignty under the Brussels carpet".
(Lord Pearson)

"The Government’s guiding principle was...to swallow the lot and swallow it now."
(Sir Con O’Neill, the British diplomat who led the UK’s negotiations for EEC membership under Heath)

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"The EU is the old Soviet Union dressed in Western clothes"
(President Gorbachev)

"Europe's power is easy to miss. Like an 'invisible hand', it operates through the shell of traditional political structures. The British House of Commons, British law courts, and British civil servants are still here, but they have all become agents of the European Union implementing European law. This is no accident."
(Mark Leonard co-founder and director of the European Council on Foreign Relations, the first pan-European think tank)

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(Wikipedia)

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“I have never understood why public opinion about European ideas should be taken into account at all,”
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"The European Parliament is a caucusing body that is incredibly responsive to lobbying institutions, but it is completely unresponsive to public opinion."
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(Roman Herzog, German president, 1996)

"The European system of supranationality comes at the cost of democracy."
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"The [EU] Council of Ministers will have far more power over the budgets of member states than the federal government in the United States has over the budget of Texas."
(Jean-Claude Trichet, current head of the European Central Bank)

"One must never forget that monetary union, which the two of us were the first to propose more than a decade ago, is ultimately a political project. It aims to give a new impulse to the historic movement toward union of the European states"
(Giscard d’Estaing, who drafted the EU Constitution 1997)

"The process of monetary union goes hand in hand, must go hand in hand, with political integration and ultimately political union. EMU [economic and monetary union] is, and always was meant to be, a stepping stone on the way to a united Europe"
(Wim Duisenberg, first president of the EU Central Bank)

"Once the interlude of [WWI] was over, [countries] all went back to the rules and customs of traditional parliamentary democracies. I felt out of my depth."
(Jean Monnet 'Father of Europe')

"We need to build a United States of Europe with the [EU] Commission as government."
(Viviane Reding, EU Commissioner 2014)

"We had imagined a political 'grand design', a new international order..."
(Jean Monnet 'Father of Europe')

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(Jean Monnet, 'Father of Europe')

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(Jean Monnet, 'Father of Europe')

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(Lady Thatcher, Statecraft)

"There is no question of Britain losing essential national sovereignty”
(Ted Heath)

Euro quotes

"Euro has done more to enforce budgetary discipline in rest of Europe than any number of exhortations from IMF or OECD".
(Nick Clegg, 2002)

"We're happy to give the Greeks anything, just not money".
(German MEP Markus Ferber 2010)

"The Euro has been a rock of stability... Joining the single currency would be a major step".
(Labour MEP, Richard Corbett, 2009)

"The single currency... marks stability and growth and is crucial to high levels of growth and employment".
(Tony Blair 1998)

"Britons will come round to the idea [joining the euro] once they’ve handled euro money".
(Adam Boulton Sunday Times, 2001)

"Staying out of the Euro will mean progressive economic isolation for Britain".
(Peter Mandelson, 2003)

"The European Union must take a decisive step towards a federal economic government, with common fiscal policies and a larger budget, if it is to save the euro".
(Andrew Duff Lib Dem MEP 2011)

"A European currency will lead to member nations transferring their sovereignty over financial and wage policy as well as monetary affairs".
(Hans Tietmeyer, head of the Bundesbank, 1991)

The single currency is the greatest abandonment of sovereignty since the foundation of the European Community: the decision is of an essentially political nature".
(Felipe Gonzalez, a Spanish former PM, 1998)

"The euro area now represents a pole of stability for those countries participating in it by protecting them from speculation and financial turmoil. It is strengthening the internal market and contributing to the maintenance of healthy fundamental figures, fostering sustainable growth".
(European Council conclusions, 2001)

"We must enter the euro with a clean sheet on all the criteria".
(Then Greek Finance Minister, Yannis Papantoniou, 1999)

"The reality of the euro has exposed the absurdity of many anti-European scares while increasing the public thirst for information. Public opinion is already changing…as people can see the success of the new currency on the mainland".
(Kenneth Clarke MP, 2002)

"The euro is a great success, and in today’s global economy, the pound is no longer an important currency. If we are not careful, we could become like Iceland in the next financial crisis".
(BT Group Chairman, Sir Michael Rake, 2009)

"I think the eurozone has turned the corner".
(Then French Economy Minister, Christine Lagarde, 29 January 2011)

"I believe that, within the next twelve months, we will have averted contagion and stabilised the eurozone".
(German Finance Minister, Wolfgang Schäuble, 30 December 2011)

"We cannot be members of the single market without being part of the single currency, the euro...In life, fighting for a minority view is sometimes dangerous and painful. But when you know you are right, and when so much of our national prosperity depends on it, we should expect our political leaders to act".
(Virgin Group Chairman, Richard Branson, 2000)

"We are writing to make clear our concerns about the implications for business if the Government rules out membership of the euro for the lifetime of this Parliament. Such a decision would be damaging for British-based businesses, British employees and the British economy as a whole".
(WPP Group CEO, Sir Martin Sorrell, et al., 2003)

"A single currency, introduced at the appropriate time, will reduce costs for businesses that trade or invest across Europe...More investment in growing
businesses means more employment".
(Then BP Chairman, Lord David Simon, 1997)

"Joining the euro would increase our incomes and thus our standard of living...Now the countries of Europe have taken one more step towards making a truly unified market, using only one currency. If again we delay joining, we again risk falling further behind".
(Former Energy Secretary, Chris Huhne, former CBI Director General, Lord Adair Turner, et al., 2002)

"Staying out of the euro will mean progressive economic isolation for Britain. It will mean fewer foreign businesses investing here, fewer good jobs being created and less trade being done with our European partners".
(Former Business Secretary, Lord Peter Mandelson, 2003)

"Britain should join the euro within the next few years in order to enhance British power and influence".
(Centre for European Reform Director, Charles Grant, 2001)

"Joining EMU would offer multiple benefits...The euro would be good for jobs".
(Then TUC Secretary General, John Monks, 2003)

"As time goes on, people will increasingly see that there is a price to be paid for remaining outside the euro".
(Former Labour Party leader, Neil Kinnock, 2002)

"The euro may well come to be regarded in the coming years as part of the answer to saving the City from permanent decline. It was easy to dismiss the fledgling euro as a ‘toilet currency’ before we realised our own economic growth was built on sand".
(Lib Dem leader, Nick Clegg, 2009)

"Obviously joining a currency that everybody in Europe - including soon all the new European Union members - are using, a currency that American and Japanese and overseas businesses understand, has to make sense".
(Then UK Europe Minister, Denis MacShane, 2003)

"The euro, despite gloomy predictions from anti-Europeans, has proved to be a success".
(Former Lib Dem leader, Charles Kennedy, 2002)

"In reality the economic integration between Britain and the Continent is so close, and we have confirmed this because we all belong to the common market, that it can't be good in the long run to stay out of such a cardinal element as the currency union".
(Then German Finance Minister, Hans Eichel, 2002)

"There are no real benefits and some real costs to the UK of monetary independence... it makes sense from a financial stability perspective for the UK to contract out monetary policy to the ECB".
(Citigroup Chief Economist, Willem Buiter, 2007)

"Taking part in EMU would improve policy and performance enough to eliminate many of the strains that sceptics predict would emerge without the safety valve of devaluation".
(BBC Trust Vice Chairman, Diane Coyle OBE, 1997)

"The euro is like a breastplate that will become more and more resistant. The stability of the currencies within its area is without question".
(Then EU Monetary Affairs Commissioner, Yves Thibault de Silguy, 1998)

"The strict rules attached to the euro could emerge as one of the best ways to persuade the markets that we will put Humpty Dumpty back together again, put the public finances in order".
(Lib Dem leader, Nick Clegg, 2009)

"The question of entering the euro is worth a lot more to Britain than the wild anti-federalist fantasies peddled by those who think Britain should have nothing to do with Europe. Nobody of any consequence in Europe wants to create a federal super-state".
(Former Business Secretary, Lord Peter Mandelson, 2003)

The British Government Knew The Consequences In 1971

Foreign and Commonwealth Office 30/1048 - 1971

...the transfer of major executive responsibilities to the bureaucratic Commission in Brussels will exacerbate popular feeling of alienation from government. To counter this feeling, strengthened local and regional democratic processes within the member states and effective Community regional economic and social policies will be essential.

Parliamentary sovereignty will be affected as we have seen. But the need for Parliament to play an increasing (if perhaps more specialised) role may develop. Firstly, although a European Parliament might in the longest term become an effective, directly elected democratic check upon the bureaucracy, this will not be for a long time, and certainly not in the decade to come. In the interval, to minimise the loss of democratic control it will be important that the British Parliamentarians should play an effective role both through the British membership in the European Parliament and through the processes of the British Parliament itself.

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Friday, 22 June 2012

3%

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