Scrapping stamp duty for last-time buyers won't guarantee older homeowners downsize, research from Key suggests.
Just one in 12 homeowners aged 65 or over would consider moving if stamp duty was cut or abolished.
Reducing stamp duty tax for so-called last-time buyers has been suggested as a way to encourage older homeowners to downsize, freeing up valuable housing stock for younger families.
But research from equity release adviser Key suggests the impact of such a move would be limited. It found just 8% of over-65s who own a home would be prompted to downsize if there were to be a change in the tax.
Some 32% say that while it would be incentive, stamp duty is not the only barrier to moving. Meanwhile, 37% of older homeowners say changes to the tax would have no impact on their decision to move or stay put.
More than 1 million older homeowners have considered downsizing only to struggle to find a suitable property or conclude that it does not make financial sense.
But a number of industry bodies, including the Royal Institute of Chartered Surveyors (RICS) have called for changes to stamp duty ahead of the forthcoming Autumn Budget in November. Some 64% of estate agents say they would welcome the scrapping of the tax for older homeowners.
Will Hale, chief executive at Key, says: "Making changes to the stamp duty regime would only solve some of the issues that the housing market and the older generation is facing. Serious thought need to go into this to ensure we do not create a situation whereby people are pushed into doing something that is not actually in their best financial, emotional and social interests."
Changes to stamp duty have already been used as a tool to help tackle the UK’s housing crisis. First-time buyers purchasing homes worth up to £300,000 (or up to £500,000 in London) now pay no stamp duty at all. Figures show some 121,500 first-time buyers have benefited from the move, which was announced in November 2017.
This article was first written for our sister website Money Observer.