Zoomf Blog - UK Property Blog.

Gordon Brown’s government has announced the it is ax’ing the stamp duty on properties less than 175,000 gbp in hope of reviving the property market. London estate agent, Winkworths, wonders if this will have any effect in London or mostly be a boost in the provincial market. Read all about it here.

RICS are urging the Government to overhaul the stamp duty land tax to create a much fairer system for consumers, and they’re not just asking politely either. RICS have outlined an entire proposal that would benefit 99% of home buyers should it come into effect.

RICS proposes the abolition of the existing slab tax system, and in it’s place suggest a two tier marginal tax system. No one would pay stamp duty on the first £150,000 of a house price. Above this value a 2.5 percent marginal rate would be charged on every pound up to £250,000, with a 5 percent marginal rate applying to every pound thereafter.

If the proposal came into effect, everyone purchasing a home under £1 million (99% of us) would pay less stamp duty. Currently, a buyer looking to purchase a £250,000 property will have to cough up £7,500 in stamp duty. Under the RICS proposal they would now pay only £2,500. Naturally, this makes the property market that little bit more accessible and would come as particularly good news to struggling first time buyers.

RICS Director of External Affairs, Gillian Charlesworth had this to say…

“After having mortgages pulled from beneath their feet from lenders facing the full brunt of the credit crunch, consumers are looking to the Government for help. HM Treasury needs to find a way to implement this policy or, if they can’t do this imminently, to introduce a stamp duty holiday that will get the market moving.”

If the proposal came into force, there would be a reduction in Government revenue by up to 24 percent, but given the 40 percent rise in stamp duty revenue in recent years (up from £4.6 billion in 2005/06 to £6.45 billion in 2006/07) RICS believe there is room for manoeuvre.

We shall wait with bated breath.

…and you can probably add ‘Big Brother being crap but watching it anyway’ to that list too.

But what if you could avoid tax?

My intellectual background is in Economics, and one of my favourite economists, John Maynard Keynes, once said “The avoidance of taxes is the only intellectual pursuit that carries any reward.” And he’s probably right. But, as even Einstein saw the tax system as ‘the hardest thing in the world to understand’, it’s not exactly easy to play the system.

Maybe Zoomf can help you.

Well we can help on the property side of things anyway, which basically means stamp duty tax. Whenever somebody purchases a property above £125,000 they are required to pay a percentage of that price to the good old Inland Revenue. So if you’re looking in London, it’s basically a given that you will be paying some sort of stamp duty. Correct?

Not neccessarily.

Currently on Zoomf there are 113 properties for sale under £125,000, which means no stamp duty tax. And these aren’t garages in Enfield, these are real properties in real London. ‘Real London’ obviously being the technical term for central London i.e not Surrey, Essex and Kent. So grab one of these properties and you’ll be laughing all the way to the bank.

And what if you want to pay just a bit of tax but not too much? You know, so you don’t feel guilty next time you call 999 or drop your child off at school. Well, there are 521 properties in central London that are between £125,000 and £249,999 which means you only have to pay 1% of the cost as stamp duty, which obviously isn’t lovely but is a lot better than the 4% you have to pay on properties over £500,000.

My personal favourite property sans stamp duty is this two bedroomed houseboat moored in Kings Cross. Very central and I kind of like the idea of living on a boat, there’s an air of romanticism to it. If Kings Cross got too noisy I could just sail away and moor up somewhere else. A floating address, wonderful stuff.

With an average stamp duty bill of more than £7,500 in 97 constituencies, the Inland Revenue raked in nearly £4 billion in stamp duty tax alone last year. So stick it to the system, tell Zoomf you’re tight fisted budget and Zoomf will give you a bunch of properties that avoid the taxman, even in central London.