‘Scrap this nasty tax!’ Hunt must rescue pensioner homeowners in Autumn Statement | Personal Finance | Finance

Campaigners say this would help older people struggling to heat and maintain larger family homes by offering targeted cuts in Wednesday’s Autumn Statement. Waiver of the levy on so-called “last buyers” to move to smaller, more manageable properties would free up homes for young, growing families in need of space.

Stamp duty raises around £15billion a year but has been widely criticized as a tax on mobility.

Home buyers pay it if their home costs more than £250,000. It starts at five per cent and rises with property values ​​to a maximum of 12 per cent for homes costing more than £1.5 million.

It now adds £2,980 to buy a typical house, worth £309,616 in August, says the Land Registry.

An elderly person downsizing from a property worth £750,000 to a property costing £500,000 would pay £12,500 on their new purchase.

The burden is set to get worse as the threshold will drop to just £125,000 in March 2025, raising the bill for an average home in England to £5,480.

First-time buyers in England or Northern Ireland currently pay no stamp duty on properties worth up to £425,000.

Downsizers get no tax breaks and campaigners want this changed.

Conservative MP for Ashford Damian Green said: “Exempting older people from stamp duty when they move into a more suitable home would be an effective and dramatic way of achieving this.”

Mr Green said: “This would help to free up the whole housing market, and encourage wider home ownership.”

Darwin Friend, of the Taxpayers’ Alliance, said: “By making it harder to move, the tax makes life harder for all families, young and old. Jeremy Hunt could score an easy victory for taxpayers of all ages by scrapping this evil tax. .”

Paula Higgins, head of the Home Owners Alliance, said stamp duty for those looking to free up equity in their home “could tip the balance as it might make financial sense to wait and use equity release instead”.

Jonathan Rolande, spokesman for the National Association of Property Buyers (NAPB), said: “Many older homeowners have been keen to downsize for some time and could end up with stamp duty on their new home. , their flat or bungalow to encourage them to take action.

Almost one in four say they intend to downsize in retirement but 22 per cent say the transfer process is too expensive and 13 per cent fear stamp duty costs, the consultants found finance Hargreaves Lansdown.

Home buyers have paid £8.6 billion in tax so far this year, Coventry Building Society says using HMRC figures.

From census data, Coventry says there are at least 24.5 million spare rooms across England. TheTreasury said: “Most owners who want to downsize are likely to have equity in their current property, and they are already exempt from capital gains tax on any gain. made on their principal residence.”

Adrian Lowery, financial analyst with wealth manager Evelyn’s partners, said stamp duty bills are a disincentive towards downsizing. “Many retirees rely on equity release and lifetime mortgages but they can become unexpectedly expensive and burdensome, and could leave their beneficiaries with a surprise.”

READ MORE: Jeremy Hunt considers inheritance tax and stamp duty cuts

Lowery said the stamp duty “block” adds to the shortage of family homes on the market and makes it less possible and more expensive for young buyers.

Many older people feel trapped in their old homes, said Carolyn Matravers, director of late-life consultants Bluebell Financial Management. “I have a lot of clients who can’t sell in the current market or fear they won’t go up as much as expected. Many of them only use a room or two out of a large family home that was far too big for them.”

Reports of stamp duty relief or a reduction in the Autumn Statement could be “good news”, Lowery added.

A Treasury spokesman said: “To drive the deal forward the Stamp Duty Land Tax (SDLT) nil rate band has doubled from £125,000 to £250,000 – reducing SDLT bills for all house moves up to. £2,500 until 31 March 2025.

“Most owners looking to downsize are likely to have equity in their current property, and are already exempt from capital gains tax on any gains made on their main residence.

“For most people looking to downsize, the stamp duty due on the move-in property will be lower than the estate agent’s fees.”