Stamp Duty - should downsizing pensioners be exempt?

There’s been another call for the government to reform stamp duty - and this time the request is that the duty should be abolished completely for pensioners moving house.

Lord Best - a cross-bencher, former chair of The Property Ombudsman and also a member of the All Party Parliamentary Group on Housing and Care for Older People - says scrapping the duty for pensioners would encourage them to downsize and thus release family housing for younger buyers. 

Lord Best told The Yorkshire Post: “The Treasury gets more money because there is a chain of people who also move and have to pay stamp duty. I think they might buy it, it is a nice easy one for them. ... You get two-and-a-half moves as well as the older person’s move, on average, and you work out the gain, which is more than the loss. 

“If you are down-sizing you are probably going to take some cash out of the deal, so you are going to buy somewhere worth less than the place you are selling. They are not getting any stamp duty from you buying the cheaper place, but the person buying your place, which is more valuable, you get the full stamp duty on that. If you don’t move and just rattle around there, they never would have got that.” 

He insists that there would be wider benefits beyond the housing market and the Treasury’s income. 

Older people encouraged to move and be near their families may mean fewer age-related problems caused by accidents, resulting in less pressure on the NHS and social care. 

Lord Best, who is based in Yorkshire, told the newspaper: “If you get in a helicopter over Harrogate all the housing is three-bedroom housing with gardens, though there are some small blocks of flats. If you take your helicopter and keep going to Penzance, England is three-bedroom houses, a lot of these occupied by two or one person ... That is OK when they are 65, not so good when they are 75 and hopeless when they are 85.”

Meanwhile the new housing minister Kit Malthouse says having a view on any proposed change to stamp duty - as suggested by his former colleague Boris Johnson - is “above my paygrade.”

Malthouse refused to be drawn on the issue when he underwent robust questioning on BBC Radio 4 Today’s programme. He declined to give any view, from his department or personal, on the issue which hit the headlines again on Monday when Johnson called for the “absurdly high” levels of stamp duty in the UK to be cut.

However Malthouse did insist that “95 per cent” of buyers are now paying less stamp duty than before because of reforms introduced by the government in the past - the large scale changes announced in late 2014 and effectively scrapping duty for many first time buyers announced late last year. 

The minister, who was elected to Parliament in 2015, was previously a membr of the London Assembly and worked closely with Boris Johnson, who was Mayor of London at the time.

Malthouse told Today that he would have apologised for some of the remarks Johnson made last week about Muslim women’s religious attire.