Scrapping stamp duty for pensioners would free up millions of homes for growing families, survey finds


Published : 28th August 2018

News

Scrapping stamp duty for old people would see nearly three million pensioners downsizing and freeing up large homes for younger families, a survey has found.

A YouGov study found that 22 per cent of over-65 year olds would be more likely to move if there were given a one off exemption from paying the tax when they move.

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

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

The measure was also backed by under-30s with half of them saying that pensioners should be granted the measure to encourage them to downsize.

Incentivising pensioners to move 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, McCarthy & Stone’s chief executive, said: “There’s plenty of focus on building homes for first-time buyers, but ‘last-time’ buyers have been forgotten.

“Downsizing is good for older people. Benefits include improved health and wellbeing, friendship and a potential financial boost from equity release. It also benefits younger people.

"A one-time stamp duty exemption for older downsizers would encourage up to 2.6 million more people to move, freeing up much needed stock for families and first-time buyers.

“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 buying a £925,000 property incurs a £36,250 levy.

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

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 so they do not need to move.

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. Lord Best said: “If you don’t move and just rattle around there, they never would have got that.”

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.

YouGov surveyed a nationally representative sample of 3,000 UK adults aged over 65 and 700 adults aged under 30.

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

“Our cut to stamp duty for first time buyers will help over a million people get onto 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."


Source:- https://www.telegraph.co.uk/politics/2018/08/24/scrapping-stamp-duty-pensioners-would-free-millions-homes-growing/