Published on: 3 Oct 2018
The recent news that the government could be planning to cut or abolish stamp duty has left some senior citizens considering moving home.
However, recent studies have shown that just one in 12 homeowners over 65 would in fact consider moving if the legislation went through.
One of the suggestions put forward to free up valuable housing stock for younger families is to reduce stamp duty and encourage so-called last-time buyers to downsize to a smaller home. However, research from equity release adviser Key suggests the result of such a move would not have a great deal of impact. It found just 8% of over-65s who own a home would be tempted to downsize if there were to be a change in the tax.
For many the incentive is there, however 32 % say that while it is certainly a motivating factor, there are other barriers in the way. A further 37 % of older homeowners have stated that a change in tax would have little or no impact on their decision to move.
The struggle to find a suitable property in today’s market is the biggest concern for more than 1 million older homeowners. Without finding the right property, it simply does not make financial sense.
Some 64% of estate agents say they would welcome the removal of the tax for older homeowners. There have also been a number of industry bodies, such as the Royal Institute of Chartered Surveyors (RICS) who have called for changes to stamp duty ahead of this November’s Autumn Budget.
Will Hale, chief executive at Key, says: "Making changes to the stamp duty regime would only solve some of the issues that the housing market and the older generation is facing. Serious thought need to go into this to ensure we do not create a situation whereby people are pushed into doing something that is not actually in their best financial, emotional and social interests."
The UK’s current house crisis is a problem for many. However, a change to the law regarding stamp duty may play a small role in the tackling the problem. For example, first-time buyers purchasing homes worth up to £300,000 (or up to £500,000 in London) now pay no stamp duty at all. This move was announced in November 2017 and figures show that some 121, 500 first-time buyers have profited from the change.
Further revisions could see more benefits if the law is to change further in the coming years, however many feel that the change would be minimal at best.
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