Stamp Duty

It's raining, but the train was on time, and so was the bus. shouldn't be complaining.

I've just received a mail from friend Dave. He's going to vanish to Ottawa in just a few short weeks and we are to assemble for a goodbye picnic at a local nature reserve. Sounds fun, as long as it doesn't bucket down with rain of course.

There were four of us in my gang at university, Dave was the oldest. When he goes to Canada, all of us will have gone to work abroad at one time or another. In fact, when he goes, two of us will be in Canada. Dickie worked a year or two in California. I worked five years in Taipei. It's odd isn't it, that all of us thought that foreign countries offered us something that we couldn't get at home.

I know I said I wasn't going to talk politics this week, but I want to mention the latest idiot idea from the Treasury. Word on the Street is they are planning to defer Stamp Duty. Stamp Duty is a really sly tax extracted from people buying a house. It has a sliding scale. Most people have to pay 1% of the value of the house they buy in tax. People buying homes worth over £500,000 must pay 4% of the value of the property. Last year the government managed to steal £6.5 billion this way. It's a lot of money. The housing market is collapsing however and this particular cash cow is going to whither away. During the last recession the Conservative government scrapped Stamp Duty temporarily to help the housing market recover, and it did help. But you notice that the current Labour government appear to be planning to 'defer' payment.

Two things; first, this won't help the housing market because buyers still have to pay the tax, and mortgage lenders know it. Second, and this is the big one, anyone who does take advantage of this still runs the risk of buying a house which subsequently decreases in value plunging them into negative equity. And who wants to owe money to the bank and the treasury at the same time?

I'm not going to continue in case this becomes a rant.