Chancellor Jeremy Hunt is coming under increasing pressure to make changes to Stamp Duty tax to make it more affordable for older people to downsize to smaller properties and free up much needed housing stock.
Earlier this month how data from Pegasus showed the costs of paying Stamp Duty and the hassle of moving are the main reasons why just 14% of those aged over 55 and who are not yet retired are considering downsizing.
And both Lord Mandelson and Lord Heseltine say that elderly homeowners should be exempt from Stamp Duty outright while another change put forward by some MPs would be to cut the tax for energy efficient homes.
CHANGE THE HATED TAX
Now more experts are calling on Hunt to make changes to the hated tax.
Nick Sanderson (main picture), Chief Executive at retirement living specialist Audley Group, says: “A stamp duty cut for downsizers should stimulate movement at the top of the market, encouraging people to move out of large family homes, but it’s important to remember that a financial incentive is just one part of the puzzle.”
He adds: “There is a chronic lack of age-specific housing in the UK. If we aren’t giving people the properties to move into, in the right locations, the stimulus can’t achieve its full potential. The government must prioritise the delivery of age specific properties – and do so quickly. While stamp duty continues to be debated, there is a supply challenge that has to be met.”
TARGETED REFORM
David Hannah, Cornerstone TaxAnd David Hannah, Group Chairman of Cornerstone Tax, says the treasury should look at well-targeted reform to Stamp Duty as a means to bolster transactions and upward-mobility within the UK housing market.
Hannah says one easy fix for policymakers would be to reassess the current thresholds for Stamp Duty payment, homes that are valued at £250,000 or less are currently exempt, with a 5% levy being charged on homes valued between £250,000 and £925,000.
OVERDUE AN OVERHAUL
He adds: “Payment bands have been long overdue for an overhaul as they have never been index-linked to house price inflation.
“An increase to these thresholds would stimulate activity at the lower end of the property market and allow first-time buyers to reduce the amount they need to borrow, thus improving their affordability calculations.
“As we all know, a rising tide lifts all boats, those looking to purchase properties on the mid-to-high end of the property market will now have a chance to sell their low-end properties as a result of the increase in demand from prospective buyers, contributing to further momentum within the housing market.”
