We’re stuck in austerity deadlock in Britain: older homeowners calling for stamp duty cuts

During his 32-year career as a salesman for US food giant Del Monte, Malcolm Clare became affectionately known to friends as the man who liked to say yes – after actor Brian Jackson in the company’s advertisements, who endorsed the fruit used: ‘The man from Del Monte, he says yes.’

Malcolm, 79, from Swindon in Wiltshire, is now long retired and looks back on his career with fondness. He likes to share photos of himself dressed in his finery as the man from Del Monte.

Yet Malcolm, like many homeowners of his generation, is now firmly in ‘no’ rather than ‘yes’ mode – that is, ‘no’ to stamp duty, the costs of which have recently prevented him from moving to a smaller property less than a mile from where he currently lives with 76-year-old wife Lynne.

“The government should encourage us golden oldies to move out of our big houses,” he says. “But it has made downsizing an unfeasible financial proposition for many of us.”

It’s an issue he raised with Justin Tomlinson, Conservative MP for North Swindon, who offered a sympathetic ear.

Stamp duty is seen by most homeowners as an unfair tax – a form of double taxation. It is also a barrier to moving home

And it’s an issue that many Tory MPs now firmly believe Chancellor of the Exchequer Jeremy Hunt must address in next Wednesday’s Budget.

In a nutshell, they are calling on the Chancellor to abolish stamp duty for those looking to downsize in retirement.

Members of the 107-member One Nation Conservatives, a group of ‘moderate’ Tory MPs, believe such a bold move would free up the housing market, allowing people to climb ever higher up the property ladder; increase the number of transactions; and give a boost to the economy.

Earlier this week, the renowned Institute for Fiscal Studies (IFS) said that while there was ‘weak’ economic case for tax cuts, stamp duty on property purchases was ‘particularly damaging’ – and would ‘push the front end of the economy’ must be targeted. the queue for growth-friendly austerity’.

The calls from One Nation and the IFS follow a campaign launched by Money Mail earlier this month to abolish stamp duty – a move we believe would be welcomed by young and old alike.

It would also confirm the Conservative Party, which is struggling in the polls, as the main flag-waver for home ownership.

Stamp duty is seen by most homeowners as an unfair tax – a form of double taxation. It is also a disincentive to move because the rate increases as the purchase value of a home increases.

Currently, a home mover pays stamp duty on transactions over £250,000. The rate is 5 percent on the value of £250,001 to £925,000; 10 percent from £925,001 to £1.5 million; and 12 percent on any surplus.

So, for example, someone buying a house for £500,000 would currently pay stamp duty of £12,500, although this would rise to £18,750 from April 2025 if zero interest rates fall back to £125,000, as the government has said. .

For a buyer of a £900,000 property, the respective stamp duty costs are £32,500 and £38,750. This tax is in addition to other moving costs, such as broker costs, notary costs and the rental of a moving van.

Can't move: Anne Savory and her husband Ted want to sell their house in West Suffolk and move closer to their children

Can’t move: Anne Savory and her husband Ted want to sell their house in West Suffolk and move closer to their children

For Malcolm Clare, stamp duty is an ‘insidious’ stealth tax, a ‘national scandal’ that makes downsizing a ‘financial non-starter’.

This is despite the fact that he and Lynne, a former secretary to the chief accountant of a financial services company, are desperate to move.

The Clares live in a four-bedroom house; it has been their home for 37 years. But they now want to move to a bungalow. “We’re not getting any younger,” says Malcolm, “and the stairs in our house are going to become a challenge sooner or later.”

They thought they had struck gold last month when they saw a three-bedroom bungalow for sale less than a mile from where they live. “Bungalows on the market here are as rare as hen’s teeth,” he says.

They also attract buyers among both young and old, resulting in premium prices.

It meant the bungalow would cost more than the price the Clares could get for their larger home: £435,000 versus £400,000.

As well as finding money to plug the shortfall, the Clares would also have had to pay stamp duty of around £9,250, plus estate agents’ fees ranging from £5,250 to £10,000, as well as other costs.

“A move didn’t make financial sense,” Malcolm says. A few weeks ago he wrote to his MP Justin Tomlinson, who responded by saying that he, and the Conservative Party generally, supported changes to stamp duty that would allow people like him to make cuts and free up ‘family homes’ to give to the state. market.

Still, he understandably couldn’t give any guarantees about when changes would come.

“Next Wednesday would be fine,” Malcolm says.

It is an opinion shared by other readers. Anne Savory, from Kedington in West Suffolk, lives with husband Ted in a three-bedroom bungalow.

Both are retired in their mid-70s and love the home they have lived in for the past eight years.

‘We have a huge garden with the River Stour at the bottom,’ says Anne, a retired accountant. “But we’re getting to the point where we can’t do it anymore and the house is way too big for us.”

Anne and Ted would like to live closer to their children, three of whom live in and around the Essex-Hertfordshire border.

Malcolm and Lynne Clare, from Swindon, Wiltshire, are desperate to move out of the four-bedroom house they have lived in for 37 years

Malcolm and Lynne Clare, from Swindon, Wiltshire, are desperate to move out of the four-bedroom house they have lived in for 37 years

But the cost of homes in these locations proves prohibitive.

For example, a two-bedroom bungalow in Bishop’s Stortford, Hertfordshire, where one of their children lives, would cost around £450,000, with stamp duty of £10,000.

Although their home in Suffolk is valued at a higher rate, Anne says stamp duty and all other moving costs would be financial ‘killers’. “If stamp duty were abolished or reduced it would make a big difference,” she adds.

‘The housing market would also receive a major boost and the bungalow we live in could become a family home again.’

Ray Martyn, from New Milton in Hampshire, is also looking to downsize. The former civil servant is now in his late seventies and recovering from cancer. He lives with his wife Louise in a three-bedroom bungalow with large gardens to the front and back, which are becoming ‘a big job’ to maintain.

They recently viewed a two-bedroom apartment in a new development nearby, which would have cost around £600,000 to purchase.

But they were shocked by the £17,500 stamp duty bill they would have incurred, plus other moving costs which Ray calculated at around £12,000.

Like the Savorys, the Martyns could free up shares through downsizing (about £100,000), but Ray says the money would be for their three children and six grandchildren. “I object to paying £17,500 in tax for a move,” says Ray. ‘The government should think outside the box a bit.

‘If stamp duty for downsizing companies were reduced or abolished, they would still receive Value Added Tax (VAT) revenue from bills charged by companies involved in the relocation process – lawyers, estate agents and moving companies. As it stands now, we’re not moving. Time to look for a good gardener.’

Chris Roberts, a former pilot from Great Bookham in Surrey, says the availability of suitable housing for downsizing businesses is also a key issue that needs to be addressed.

The 79-year-old says: ‘Where we live, many houses that were suitable for downsizing 30 years ago are no longer suitable because they have been extended – enlarged. As a result, we find ourselves pottering around our five-bedroom house instead of moving.”

Fingers crossed for next Wednesday – and good news on the stamp duty front. Let’s get the housing market moving (if you know what I mean).


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