Reduced stamp duty for pensioners could help boost property market

Plans to offer tax breaks to retirees looking to downsize their homes have been welcomed by a leading property group.

The National Association of Property Buyers (NAPB) said the proposals could help free up the market at a time when supply is rapidly becoming an issue.

Jonathan Rolande of NAPB said: “We would welcome a reduction in stamp duty for retirees who sell their own homes to downsize. This would allow them to move without the penalty of high SDLT and would certainly encourage others to do so. Currently a pensioner selling a family home for £700,000 to buy for £500,000 would face a stamp duty bill of £15,000 and along with other costs such as estate agent and solicitors, lowering their will cost nearly £30,000 – a figure many simply cannot bring themselves to pay when leaving a much-loved family home. Government revenue from stamp duties has more than doubled in the last ten years, so there is certainly room to offer targeted reductions to help free up stocks.

Mr Rolande’s comments come days after the stamp duty reduction plans were revealed.

New proposals could also encourage buy-to-let owners, such as a reduction in capital gains tax, to sell their second homes to first-time buyers.

However, Mr. Rolande said that this measure could backfire on you:

“We strongly disagree with any plan to reduce taxes for homeowners selling to first-time buyers,” he added.

“The last thing we need right now is fewer rental properties, penalizing those who are unable to afford their homes. If tax breaks for wealthy homeowners are on the table, why not not use them to incentivize those who let their property on longer term agreements, giving struggling tenants more security?We are very pleased that the government is considering measures to fix parts of the broken property market, but I fear that t thoughtless action to solve a problem here does not create another elsewhere.

More and more young people are finding it difficult to get their foot on the real estate ladder and prices continue to rise.

Yet, at the same time, nearly four in ten properties are officially “underoccupied,” meaning they have too many bedrooms for those who live there, and could be used more effectively by families with children.

The new ideas follow Housing Secretary Michael Gove’s decision to scrap most of the government’s changes to the planning system in England.

These would have forced the councils to guarantee the construction of a certain number of houses, but sparked a violent reaction in the conservative counties.

Last November a minister said he wanted to encourage older people to ‘walk around’ in houses too big for them to shrink.

No stamp duty is paid on the first £125,000 of a home’s value, 2% on the proportion up to £250,000, 5% on the amount up to £925,000, with higher rates subsequently raised.

The average house price in Britain is £367,501, a record for the fourth consecutive month as demand soars after the pandemic, the Rightmove website has said.

According to their data, the number of buyers contacting estate agents is down 14% in the market fueled by stamp duty holidays this time last year, but is still up 31% from the market. more “normal” pre-pandemic of 2019. The number of properties available for purchase is 55% below levels seen in 2019, meaning that supply and demand are expected to remain out of sync for at least the rest of the year. The number of agreed sales is up 12% year-to-date compared to 2019, even with limited choice, but down 17% compared to the “exceptional” market in the same period last year .

“The market has yet to fully reflect the various pressures that will be brought to bear on it over the coming months – higher interest rates, increases in the cost of living and tougher affordability checks by lenders. will all have an effect,” Rolande said.

“However, there is still very strong demand from buyers and, of course, the now long-term problem of supply shortages. Coupled with good employment figures and the aspiration of many to become owners, it is possible for the market to slow without the free fall in prices predicted by many.

“Targeted government intervention to guide the market to where it should be is crucial to unlocking supply and helping those who need it most.”

Penny D. Jackson