Downsizing stamp duty exemption 'would boost market and Treasury'

Over a fifth of pensioners say they would be encouraged to downsize if there was a stamp duty incentive - particularly an exemption - to help them do so. 

McCarthy & Stone, the retirement developer which commissioned a survey of pensioners, says this is equivalent to almost 2.6m over-65s who would move.

This is far more than the result of a similar poll a year ago, when just 10 per cent of pensioners said they would be more likely to move with a stamp duty exemption.

The developer says such a perk for over-65s would boost downsizing and kickstart sales across the housing supply chain, freeing up housing for first-time buyers and second steppers.

According to the firm, those 2.6m potential downsizers could release £230.8 billion worth of equity from their homes to boost their finances while also freeing up a total of £924.9 billion of housing stock.

Even without an exemption 35 per cent of over-65s are already considering moving, should suitable properties be available, equivalent to 4.1m people.

The same research shows that half the under-30s say retirees should be granted this to encourage them to downsize, highlighting the importance young people also attach to freeing up under-occupied housing.

McCarthy & Stone is calling for a Help to Move package that includes a stamp duty exemption for older people: it cites separate research by the Institute of Public Care which found that an exemption could give the Treasury around £740m a year from additional stamp duty and other taxes paid through the new housing chains - even accounting for the loss of revenue creasted by the exemption for older downsizers.

There would also be substantially greater fees going through the estate agency industry if more chains were created.

“There's plenty of focus on building homes for first-time buyers, but last-time buyers have been forgotten. With the UK's population rapidly ageing, we're facing a demographic timebomb. So, what we need is a Help to Move package, as well as Help to Buy, which would encourage downsizing for the millions of older people who want to move” Clive Fenton, chief executive of McCarthy & Stone, says. 

“Downsizing is good for older people. Benefits include improved health and wellbeing, friendship and a potential financial boost from equity release. It also benefits younger people” he adds.