A property expert has raised concerns that replacing stamp duty with a new tax could force the elderly to move.
One option is charging an annual property tax on expensive properties, the prospect of which has prompted an anxious reaction from Jeremy Leaf, north London estate agent and a former RICS residential chairman, said:
He said: “We understand the issue of right sizing and getting people in the right properties as far as possible but forcing people to downsize, particularly the most vulnerable and compromised, must be avoided.
“We can see the advantage in taking tax from people who have benefited from an increase in property values but the fear is that it is going to impact the vulnerable in particular.
“Those of retirement age, say in their late sixties, might be able to move into a flat or bungalow (should they be able to find a suitable one) with not too much of an issue.
“But for those more on the margins, say in their early eighties, who are not so mobile and don’t want to move out of an area where they have lived comfortably for many years near family and friends – why should they have to move some distance where property prices happen to be cheaper?”
Rather than opting for the annual route, it’s thought Chancellor Rachel Reeves is considering charging the tax on sellers of properties worth over £500,000.
Nick Sanderson, CEO and founder of Audley Group, raised concerns that it could prevent older people from downsizing.
He said: “There is no doubt that the Stamp Duty system is in need of reform but the government must tread carefully on any legislative change that could put the brakes on the housing market.
“Property taxes applied at the point of sale can deter sellers and disincentivise downsizing, something that is crucial for unlocking larger family homes and prompting movement up and down the property ladder.
“As the Chancellor considers the government’s next move, policymakers must consider taxes that don’t penalise sellers at the point of transaction alongside targeted reliefs that can support downsizers, and in particular those moving into specialist retirement living communities.”
If Rachel Reeves opts to change stamp duty it’s seemingly impossible to find a solution that pleases everyone.
