Elderly downsizers may get tax break to free up homes in bid to boost number of properties available to young buyers
- Ministers consider stamp duty cuts for pensioners ‘rattling around’ in houses
- They want to make it easier for younger people to get on the housing ladder
- Four in ten properties are ‘under-occupied’, meaning families could use them
- Whitehall to persuade older people to move out of houses into smaller homes
- Average price of a home in Britain is £367,501, a record high as demand soars
Pensioners who downsize could benefit from stamp duty cuts to free up properties for the young under proposals being considered by ministers.
Buy-to-let landlords could also be given incentives, such as lower capital gains tax, to sell their second homes to first-time buyers.
The ideas, in the very early stages, aim to make it easier for younger people to get a first foot on the housing ladder.
There is growing concern they cannot buy a home as too few are coming on the market, meaning they are over-priced.
Almost four in ten properties are officially ‘under-occupied’, meaning they have too many bedrooms for those living there, and could be more effectively used by families with children. Although the plans have not yet been signed off, the Prime Minister is understood to be keen to do something radical on housing before the next election.
Officials in Whitehall have suggested doing more to help the young by persuading older people to move out of their family-sized houses into smaller homes better suited to their needs.
Housing minister Chris Pincher told the House of Lords that almost four in ten properties are ‘under-occupied’ and could be better used by younger families with children
This could be facilitated by reducing the amount of stamp duty that pensioners have to pay if they move to a smaller home.
Cutting the number of properties owned by buy-to-let landlords would also help and this could be encouraged by charging less capital gains tax if they sell a second home to a first-time buyer. At present they pay 18 per cent on any gain as a basic rate taxpayer or 28 per cent if they are a higher rate taxpayer.
The new ideas follow Housing Secretary Michael Gove’s decision to ditch most of the Government’s changes to the planning system in England.
Whitehall officials have suggested doing more to help the young by persuading older people to move out of their family-sized houses into smaller homes better suited to their needs
These would have forced councils to ensure a certain number of homes were built but sparked a backlash in the Tory shires.
Last November a minister said he wanted to encourage elderly people ‘rattling around’ in houses too big for them to downsize.
Chris Pincher, housing minister until February, told the House of Lords that almost four in ten properties are ‘under-occupied’ and could be better used by younger families with children.
He said the Government wanted to encourage more developments suitable for pensioners so freeing up space in semis and opening up more properties down the chain for first-time buyers.
However Mr Pincher was warned by peers that ‘punitive’ levels of stamp duty were putting off older people from selling their large homes. He told them: ‘I’m keen to make sure that we look at all the barriers that exist.’
Buy-to-let landlords could also be given incentives, such as lower capital gains tax, to sell their second homes to first-time buyers
No stamp duty is paid on the first £125,000 of a house’s value, 2 per cent on the proportion up to £250,000, 5 per cent on the amount up to £925,000, with higher rates thereafter.
The average price of a home in Britain is £367,501, a record high for the fourth month in a row as demand soars after the pandemic, said website Rightmove.