Stamp duty should be eliminated for individuals over 75 to encourage downsizing and make more family homes available for younger buyers, according to Will Bax, CEO of Retirement Villages Group.
England’s property transaction tax acts as a “handbrake” preventing older adults from moving when they need to free up funds for care, Bax argued. He said:
“We need to simplify the downsizing process. Stamp duty is a significant barrier to this decision.”
Bax advocates for the removal of stamp duty for those aged 75 and above, particularly when they move into supported living settings. He stated:
“Transitioning a substantial number of older adults into these settings could address both the housing and social care crises, two of Britain’s most pressing issues.”
The trend of under-occupation has surged over the past decades, largely due to empty nesters remaining in their family homes. From 2017 to 2022, the number of homeowners with at least two spare bedrooms increased by 950,000 to 8.25 million, resulting in over 16.5 million unused bedrooms in owner-occupied homes across England, according to the English Housing Survey.
Stamp duty starts at 5% for property values between £250,000 and £925,000, rising to 12% for values above £1.5 million. Bax highlighted that the tax is a significant deterrent for older adults, who may not reside in their new homes for long and need to conserve funds for future care needs. Bax explained:
“The older generation’s psychology needs to be considered. They are reluctant to part with money that could fund future health needs or be passed on as a legacy.”
In September 2022, then-chancellor Kwasi Kwarteng raised the stamp duty nil-rate band from £125,000 to £250,000, aligning it with house price growth since 2006. This change was maintained when Jeremy Hunt became Chancellor, but higher rate bands remained unchanged, leading to increased burdens for higher-value property transactions.
