A group of Conservative MPs are lobbying the chancellor to consider scrapping stamp duty for people who want to downsize in the Spring Budget next week.
The One Nation Caucus, which represents 107 Conservative MPs, told Jeremy Hunt that he should look to “free up” housing stock by abolishing the levy for buyers seeking to downsize.
They have also urged the chancellor to use next week’s Budget to allow first-time buyers to put 25% of their tax free pension savings towards their deposits, while on the number of investment properties held by foreign buyers, they said “these represent too much of the market, especially in London”.
Writing for The Telegraph, Damian Green, chairman of One Nation Caucus, Matt Warman, vice chairman and Stephen Hammond, senior member, said a tax on foreign property investors who buy luxury flats could pay for the abolition of stamp duty for downsizers.
They said: “With the tax burden at the highest rate in over 70 years and getting on the housing ladder seeming ever more out of reach, young people are having a harder time than ever.
“Home ownership has always been a core Conservative mission, but these days even leaving your parents’ home to rent somewhere is impossible for too many.”
To address the issue of supply, the group repeated their calls to Hunt ahead of last year’s Autumn Statement to reward local authorities for meeting their advisory house-building targets.
For those authorities that build and sell 100% of their targets over the next four years, they should receive 15% of the stamp duty generated, according to the group, with the reward increased to 25% if they exceed 125% Of their targets.
Nick Sanderson, Audley Group CEO, has welcomed talk of a stamp duty cut ahead of the Budget statement on 6 March, but says more needs to be done to help downsizers.
He commented: “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. And there is a significant issue to resolve before that the jigsaw is completed.
“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.”
Sanderson highlights that at least 50,000 new units are needed annually to keep up with the ever-rising demands of the ageing population.
“This means decisive action from policymakers which greenlights the development of more specialist retirement properties and mandates their inclusion in any new development,” he added. “While stamp duty continues to be debated, there is a supply challenge that has to be met.”
Property owner ordered to pay £577,000 stamp duty after losing appeal
Give me a break, and not a tax one, abolish one of the the costs of moving for the one sector that can best afford it?
I have never, ever, had to address the fact that a downsizer is reluctant to do so because of the cost of stamp duty on the way down, period.
This generation of politicians and their special advisors are simply annoying.
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bang on, sadly there is a generation shielded from the cost of living crisis, and they should be the ones paying more not less
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I oersonally know peoople in the 60s whose kids have left home and who live in big houses who will not downsize becuae of the amount of SD
Also if older people do downsize it will just put more pressure on smaller 2 and 3 bedroom hosue for ftb and young families
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” I oersonally know peoople in the 60s whose kids have left home and who live in big houses who will not downsize becuae of the amount of SD ”
No, you don’t.
Obvs hit the Gin again early.
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Over the years since Gordon Brown whacked up stamp duty from 1%. I have met many potential vendors, potential downsizers, often retired. When they realise the amount of stamp duty (tax) they have to pay just to move. They don’t bother moving. So keep your head in the sand. And the Gov collects zero tax from these people. They sit it out in oversized houses, not budging.
When I first did this job people moved for silly little reasons. E.G. Buying a house opposite that was exactly the same house. When asked why would you go to all that trouble to move, they would say things like, the gardens opposite have south facing gardens. With the Gordon Brown levels of Stamp Duty people now only move for big reasons.
Which is everyone’s loss.
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It would be easy to come up with a revenue neutral replacement that really incentivised moving.
Completely remove SDLT and replace a portion of central government funding to local councils with a much steeper gradient on council tax plus a revaluation. Transactions would go through the roof.
Think we are more likely to see something tepid plus something aspirational towards IHT or SDLT in the election manifesto. Or just outright poisoning of the well given how the latest polls look.
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Or just go back to 1% for everyone. Which never created any problems. And the transaction levels were what 5x higher than today?
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No argument from me that sdlt is a bad tax, but there is not the fiscal headroom to chop it to 1%. 2% off income tax is the entire headroom gone, if we start seeing talk of cuts move towards NI then probably there is something brewing on IHT or stamp duty – likely a holiday for downsizers is the best spend per potential vote they could come up with. It would certainly change the type of stock hitting the market too.
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Over the years I met lots of vendors who would use any excuse available to get out of putting their house on the market…
They were only after a free valuation and had no intention of selling.
“Goodness, it will cost how much? Well then, we’re not moving!”
They never were but British people try to be polite and fail horrendously because they hide their true intentions.
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So, no stamp duty payable up to 250k, depending upon where you operate in the country, that’s often the end of it.
Arthur and Winnie want to downsize, running this big ol house no longer populated with the happy noise of children long since grown up, a nice cushion in their retirement cash flow and help for the grandchildren to get married / 1st car/ first house so that they can see the benefits rather than be 6 foot under at those happy events. House is worth 680k , purchase is 400k so a headline differential before costs 280k.
Will they continue to rattle around and not bear witness to those happy milestones for the sake of 7.5k SD? ( probably the same amount as the original purchase price in 1974 )
This before the inevitable lecture about inheritance tax, potentially having to pay for care, I’ve worked all my life etc………..
And,if you’re the agent sitting with them, you’re able to delicately insert into the conversation that that 7.5k represents about 3 weeks in said care………………………
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Hunt can’t afford it, if the rumour of 2p off personal income taxes is correct, that is his entire headroom to cut gone. Its hard to see post kami kwasi kwarteng he will go beyond the IFS guidance in any meaningful way, bond yields shooting up again would be more than a shot in the foot.
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I’ll be surprised if Gov doesn’t do something towards the housing market.
I’m not suggesting it will be beneficial or intelligent.
I feel there will be something.
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At least it isn’t matey Wilson telling all us oldies we should move to mobile home concentration camps or boiled cabbage and potato retirement flats again. He wants us to free up homes for the aspirational yoof who are frustrated that the BIG homes they were brought up in aren’t available for them to buy.
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OMG I suggested this years ago and wrote to the goverment about it, I meet so many people who are property locked because they feel they have paid SD all thier lives for the privaledge of moving up the ladder, I have had many conversations with people in large properties who would down size if they did not have to pay stamp duty, this would inturn release a lot of properties to families who are stuck in properties and cannot move up because of shortage of larger homes, this is acutually a real issue I have dicussed for many years, then maybe house builder would concentrate on smaller homes and build more.
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Policy changes and tax breaks should be brought in if it is to do away with something that prevents someone from moving.
Those who don’t want to pay stamp duty to downsize based off of the fact that it feels unfair are not being prevented from moving in the same way that a single person on £32,000 with a £25,000 deposit cannot buy a house in 2024.
It may be annoying to pay tax in this scenario, but when is tax not annoying?
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Stamp duty should go back to Pre Gordon Brown levels.
Remember like the old days. Where more people moved!
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