Charge the Mother-in-law for a visit?

9 February 2011

It has been reported that the OECD (Organisation for Economic Co-ordination and Development) is recommending a ban on the scandalously high rate of UK Stamp Duty. We at Bitter Wallet are no more fans of paying extra when already spending a shedload on a pile of bricks and mortar than the next man, but we viewed this claim with some suspicion, knowing (as we do) that UK levies are, in fact, amongst the lowest around the world. Yes, you did hear me correctly.

In fact, if you look at this table detailing the total buyer and seller transactional costs in OECD countries, the UK is only beaten by Iceland and Denmark in its cheapness.oecd report table
What the recently released OECD report actually said was that taxing property on a transactional basis may have limiting effect on mobility, but that in the UK, lack of housing stock was probably a more significant factor. But then, who wants to move house in the current market anyway?

The real story in the OECD report is their recommendations for annual housing charges instead of transactional ones. Of course, we do have Council Tax, but this is marketed as a contribution towards the cost of the fire service, police force and bin men, rather than an annual charge just for the hell of it. The OECD are critical of Council Tax being based on such outdated figures, but more worryingly, they would like to see owner-occupied housing taxed in the same way as other 'investments'.

That’s right folks, the good people at OECD would like us to pay tax on an imputed rent for our homes. They want us to charge ourselves rent, and then tax ourselves on those fictional rents we have just not paid ourselves in order to combat the “unequal fiscal treatment between housing and other investments”.

Er, thanks, but no thanks.

TOPICS:   Tax

4 comments

  • PokeHerPete
    @BW Fix your CSS in Chrome, the rhs has been screwed for ages. Otherwise I'd be happy to fix it in exchange for a Kindle.
  • Whisky
    If thats the case, every single thing I buy for the home will become tax deductable from the fictional rent. I'm sure I will run at a loss and then I can pay less income tax as a result of my loss. Yer, like they will let me do that.
  • Gunn
    Not against there being a stamp duty but I think it should only apply i.e. the first time you buy, when you move to the next place the duty should be just the difference between the current property and the new property, so if you are selling a property that incurs 1% stamp duty but are buying a home that incurs 3% you only pay 2%. There should perhaps be a new additional home tax for those who invest as they can already claim expenses as tax deductible, something you can't do in your own home!
  • Eric
    Leave it at Stamp Duty. Whilst it is an absolute bugger to pay you know you are going to have to pay it and therefore can make preparations. I would rather pay this every time I buy a property as opposed to this other proposed rental payment "thingy". Gunn - I agree about exemptions. I think that "first time buyers" should be exempt. I know that the last government gave a Stamp Duty break but it should be permanent. The definition of a first time buyer was "someone who has never before appeared on the Land Registry database". That could be unfair if you purchased a tiny piece of land or tiny property which was exempt due to threshold. Difficult one.

What do you think?

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