A group of Conservative MPs are lobbying the chancellor to consider scrapping stamp duty for people who want to downsize in the Spring Budget next week.
The One Nation Caucus, which represents 107 Conservative MPs, told Jeremy Hunt that he should look to “free up” housing stock by abolishing the levy for buyers seeking to downsize.
They have also urged the chancellor to use next week’s Budget to allow first-time buyers to put 25% of their tax free pension savings towards their deposits, while on the number of investment properties held by foreign buyers, they said “these represent too much of the market, especially in London”.
Writing for The Telegraph, Damian Green, chairman of One Nation Caucus, Matt Warman, vice chairman and Stephen Hammond, senior member, said a tax on foreign property investors who buy luxury flats could pay for the abolition of stamp duty for downsizers.
They said: “With the tax burden at the highest rate in over 70 years and getting on the housing ladder seeming ever more out of reach, young people are having a harder time than ever.
“Home ownership has always been a core Conservative mission, but these days even leaving your parents’ home to rent somewhere is impossible for too many.”
To address the issue of supply, the group repeated their calls to Hunt ahead of last year’s Autumn Statement to reward local authorities for meeting their advisory house-building targets.
For those authorities that build and sell 100% of their targets over the next four years, they should receive 15% of the stamp duty generated, according to the group, with the reward increased to 25% if they exceed 125% Of their targets.
Nick Sanderson, Audley Group CEO, has welcomed talk of a stamp duty cut ahead of the Budget statement on 6 March, but says more needs to be done to help downsizers.
He commented: “A stamp duty cut for downsizers should stimulate movement at the top of the market, encouraging people to move out of large family homes, but it’s important to remember that a financial incentive is just one part of the puzzle. And there is a significant issue to resolve before that the jigsaw is completed.
“There is a chronic lack of age-specific housing in the UK. If we aren’t giving people the properties to move into, in the right locations, the stimulus can’t achieve its full potential. The government must prioritise the delivery of age specific properties, and do so quickly.”
Sanderson highlights that at least 50,000 new units are needed annually to keep up with the ever-rising demands of the ageing population.
“This means decisive action from policymakers which greenlights the development of more specialist retirement properties and mandates their inclusion in any new development,” he added. “While stamp duty continues to be debated, there is a supply challenge that has to be met.”
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