What if Stamp Duty was abolished?

We are in the oldest cohort of boomers, born just after WWII. We live in a three bedroomed house which we own. We have no family nearby, and our health, as is fairly normal towards 80 is declining. We’d really like to downsize to a flat in an independent living complex. In the private sector, that would cost more than we’d get for our house, never mind the ongoing service charges that we can’t afford on our income.

We could use the capital we would get from selling our home to self fund, which would benefit the taxpayer, and we’d free up a house that is reasonably affordable for a young couple - judging by the several new neighbours who’ve bought recently.

Our local council won’t consider us because we’re homeowners. In hindsight, it would have been smarter on our incomes not to save for retirement. Unless you’re going to be really well off in retirement, spend on holidays, nice cars, kids, grandkids, and just rent. You could get a nice retirement flat at 60, courtesy of your local authority, paid for by housing benefits.

Abolishing stamp duty doesnt affect people who already own property
and has no effect on equity ( large small or non at all ) on their property either

If you’ve bought you’d know this

Well apparently you were saying that stamp duty is controlling the choice? It is a choice not to pay it after all and it isn’t an affordability issue from what it sounds. I can see how it would benefit someone in her position to have stamp duty abolished.

But what about all the ftbs who wouldn’t be able to buy due to the property boom, yet again? As someone who bought after covid boom calmed down, I can tell that Id rather pay 100k less for the property and pay 20k in stamp duty than the other way round. Abolishing it only benefits people who own houses or has large equity accumulation.

You’re missing the point that

1. ground floor flats on average are more expensive
2. you have no idea if she can afford it
3. you have no idea if after buying a ground floor flat there will be any left over from the sale of her second floor flat at all. Presumably not as she can’t afford the move
4. who mentioned children ???

If she can’t afford to move there’s nothing selfish about that.

If she didn’t want to move it wouldn’t be selfish either
What a bizarre thought, no one controls other people choices in life.

Thanks !!!

Not anything like 10 times then

They haven't. They have rouglhly doubled since 1980, although most of that increase was between 1996 and 2006.

https://www.cladco.co.uk/media/wysiwyg/blog/graph_real_house_price_over_time.webp

Many of us buy flats and houses that are too small for us, because they are incredibly expensive now, and have no equity to fall back onto. Plus stamp duty. So yes, she absolutely has an option buying a slightly cheaper flat and paying stamp duty, just like the rest of us. She will pay for care with the new flat equity.

Does it mean there’s less left to give away to children, absolutely, but it doesn’t mean she cannot afford stamp duty. It’s a pure selfish approach and I don’t believe anyone should be funding it with higher council tax or whatever else on top of all the stamp duties they paid to buy a place already.

Of note @CeciliaMars

they already exclude less expensive properties and have stamp tax thresholds.

Increasing in %

Exactly
it was obvious what you were saying and an issue facing many people.

To stifle success being rewarded again?

And people like us that have put hours of hard work into renovating a property wpuld then be penalised for making money on selling it.

The problem is stamp duty, inheritance tax etc all take from the hard working.

Yes, thank you. It doesn’t matter how much her current flat has appreciated in value as she would need the full sum for a new flat plus the stamp duty and at this point in life it seems a waste when she may soon have to start paying for care.

Some statistics across the country on your claim properties have increased in price 10 times in 20 years would be interesting to see.

because you do know that’s absolutely !!!!!! not the case. I’d love to know where you read that though

If you read back to @FunnyOrca post re her aunt with mobility issues in a second fl flat but can’t afford to move to a ground floor one
It matters little if she bought the flat 70 years ago or yesterday. She still needs a ground floor one and can’t afford the stamp. That’s what the poster you tagged was referring to.

You are not funding anyone’s retirement bills by paying more to buy a property. You buying a property has nothing to do with pensions …… obviously !!

Sorry makes zero sense, how can they not afford to move. Im sure they made enough in equity to pay the taxes. Why the burden yet again should be shifted onto younger generation? We’re already funding their retirement bills by paying 10 times more for the properties they’ve purchased 20 years ago.

I know. And based on the 0.5% that someone suggested above, how will councils in cheaper areas fund their services, which cost broadly the same across the country to provide. London councils would have lots of money due to property prices being higher. More deprived areas, which may need a higher level of social care etc services, wouod have much less money.

Same, we are paying nearly 4k council tax for a 3 bed house 20 miles outside London, we paid about half that when living in a 3 bed house in London.

People have brought up council tax to raise money.So why not something actually in the news today about tax changes

Because people can’t afford 20% tax on a house purchase.
Hence the tax is lower.

What’s that got to do with stamp duty?

Today’s news
Reeves looking at tightening ways in which people pass on money and assets to family

There are several different levels just to make it fun... You can calculate by popping in the property value in this link https://revenue.scot/calculate-tax/calculate-property-transactions, so while a £500k home attracts a stamp duty of £15000 in Scotland it will be £23350. The Scottish government have the ability to set their own tax rates across various sources. (Income tax is also at different rates to England - https://www.mygov.scot/scottish-income-tax/current-income-tax-rates )

For the same reason any tax is levied - to raise the money that pays for public services. Tax is payable on almost everything we buy in the form of VAT at 20%, why would houses be any different?

What is the normal stamp duty rate in Scotland? I didn’t know it was different from the rest of the U.K.