Almost half of UK homeowners over the age of 55, the equivalent to 3.6 million people, would consider moving homes if stamp duty was abolished for ‘last-time buyers’, according to a nationwide study from Key.
The equity release adviser has found that 15% of over-55 homeowners in the UK said they would definitely consider moving if stamp duty was abolished for last-time buyers, and a further 30% said that not having to pay stamp duty would influence their decision.
Separate research among financial advisers found overwhelming support for scrapping the charge, with 77% saying they would back the move subject to terms and conditions.
CEO at Key, Will Hale, said: “While downsizing is an emotive issue, increasingly people are looking at how they find a suitable property to support their later life living needs. Whether it is adapting their current property or downsizing to something smaller and more convenience for family and services, all these choices have financial implications.
“Scrapping stamp duty for last-time buyers would mean that those people who want to move would have one less barrier to overcome, as due to the lack of suitable properties, finding something in the right location can be costly. Indeed, we find that increasingly customers are using equity release to raise additional capital to buy their dream retirement home.”
In the 2018/19 tax year, stamp duty on residential transactions dropped by 10% to £8.37bn, with part of the decrease due to stamp duty relief for first-time buyers (FTBs) – around 218,900 FTBs benefitted from the change.
House owners buying again pay no stamp duty up to £125,000, but then pay 2% on the portion of the house price between £125,001 and £250,000. The charge rises to 5% on the sum up to £925,000, and then to 10% on prices up to £1.5m.
Key’s report, which comprises research asked to more than 1,000 homeowners over the age of 55, suggests that scrapping the stamp duty charge for any last-time buyers would encourage more homeowners to downsize.
Hale added: “For wider society, this move would arguably not only mean more families could move into larger homes appropriate to their needs and the property market would receive a boost, but it would ideally be cost neutral as the increased number of transactions should cover any deficit.”
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