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It has been suggested that one way to free up family homes is to encourage older people to give up the properties that are now too large for them, running up big utility and maintenance bills.
There is no stamp duty on properties purchased with a value up to £250,000, but it is then charged at 5 percent at those sold for between £250,001 and £925,000, then 10 percent between £925,001 and £1.5 million, and 12 percent above that figure.
David Forcey, aged 79, has lived in a five-bedroom house in south-west London with his wife for 35 years.
At the same time, the purchasers of their £2.5m property would be paying an eye-watering £300,000.
Mr Forcey said the tax is preventing people from downsizing and freeing up family homes.
Mr Forcey thinks a better way to tax property owners would be on the capital gain they make.
He told the Telegraph: “We’ve been here for 35 years. I appreciate that we’ve made a big capital appreciation which is tax free.
So I do think at a lower level, there should be some sort of capital gain to pay.”
But as long as current stamp duty thresholds and rates remain, the couple will continue to live in their current home and resist moving.
Sharon Scott, aged 68, moved from the south of England to Yorkshire some 20 years ago after becoming a single parent.
However, she is now keen to move back to be closer to her adult children.
But to buy a property in north Hampshire which is a similar size to her current home would land Sharon and her husband with a stamp duty bill of £90,000.
Even if they were to downsize from a four-bedroom to a less spacious, three-bedroom detached house with a garden, they would still need to set aside over £11,000 for the property sales tax.
The Government is reportedly considering increasing this threshold in England by £50,000, to £300,000. While this will be good for some house builders, by boosting demand and asking prices, it is unlikely to encourage many older people to downsize.
In Northern Ireland, stamp duty applies like it does in England. But other parts of the UK have different thresholds which are even more damaging to housing market fluidity.
In Scotland, “land and buildings transaction tax” replaced stamp duty in 2015. It kicks in at £145,000, charging 2 percent on houses up to a value of £250,000. Any value over this up to £325,000 is charged at 5 percent, and it then rises to 10 percent on anything up to £750,000, with a figure of 12 percent above that.
This means in Scotland, a £450,000 home would incur a £18,350 tax bill – but in England, the same valued property would incur a significantly lesser £10,000 bill.
On top of that, if buyers have not been able to sell their current property by the time they come to buy again – usually to downsize – they also face a 6 percent additional dwelling surcharge. In England, this surcharge is 3 percent.
In Wales, “land transaction tax” was brought in six years ago. The threshold before paying tax on a property purchase is £225,000, after which a 6 percent rate kicks in up to £400,000, and then a 7.5 percent rate.