No stamp duty for downsizers ‘would free up family homes’

SCRAPPING stamp duty for older people would encourage nearly three million pensioners to downsize and free up large homes for younger families, a survey has found.

A Yougov study found 22per cent of people over 65 would be more likely to move if they were given a one-off exemption from paying the tax.

This is equivalent to 2.6million people and is a substantial increase from just 10per cent in 2017, suggesting that support for the measure is growing.

Experts say that a stamp duty exemption could boost over-65s’ finances by £230.8 billion and release £924.9 billion of housing stock by giving them an incentive to move.

The measure was also backed by under-30s in the poll of 3,000 UK adults aged over 65 and 700 adults under 30, with half saying pensioners should be exempt from the tax.

Doing so would help over-65s to live in comfortable and safe accommodation, but also to free up housing stock for first-time buyers and young people.

Clive Fenton, the chief executive of Mccarthy&stone, said: “There’s plenty of focus on building homes for firsttime buyers, but ‘last-time’ buyers have been forgotten.

“Downsizing is good for older people. Benefits include improved health and well-being, friendship and a potential financial boost from equity release. Downsizing is also good for the Treasury, with additional gains made from greater property transactions.”

The stamp duty land tax is charged when buying property in England and Northern Ireland. In England, properties costing less than £125,000 are exempt, but buyers pay 2 per cent on anything above that up to £250,000, at which point the tax will total £2,500.

It then leaps to 5 per cent on the next £675,000, costing £15,000 on a £500,000 property, while a £925,000 property incurs a £36,250 levy.

There are 1.5million people in Britain over the age of 85, a figure set to double in the next 20 years, and to reach five million by 2050.

Fewer than 1 per cent of elderly people in the UK live in retirement villages or in housing designed to be easily adapted as people get older.

Earlier this month Lord Best – a member of the All Party Parliamentary Group on Housing and Care for Older People – said scrapping the duty for pensioners would encourage them to downsize and thus release family housing for younger buyers.

In his Budget last November, the Chancellor scrapped stamp duty for first-time buyer properties up to £300,000, or the first £300,000 on London properties up to £500,000, in a move estimated to have saved 121,500 buyers an average of £1,700 each.

A spokesman for HM Treasury said: “We want to restore the dream of home ownership for a new generation.

“Our cut to stamp duty for first-time buyers will help over a million people get on to the housing ladder over the next five years.

“We’ve helped an estimated 121,500 first-time buyers alone since the changes took effect in November.”