Retired people downsizing to fund their retirement should be exempt from stamp duty, a leading insurer has said.
So-called “property pensioners” are increasingly relying on their home to fund their retirement and LV= said waiving or discounting stamp duty would be fairer on them and help free up much-needed family homes.
The insurer said it is unfair to expect older people to pay thousands of pounds to access cash in their homes.
Its research shows that a third of people approaching retirement are relying on the money tied up in their home to live off in retirement.
This is a significant increase on the 22% of existing retirees who have done the same.
Downsizing is the most popular way to raise money from a property but comes with significant costs, with the average house triggering a £4,600 stamp duty bill.
With people living longer in retirement than ever before, LV= said it is unfair that pensioners are being indirectly penalised for accessing the money in their home to help provide an income.
More than four in 10 of those nearing retirement say they would be more likely to downsize if a tax cut were introduced, allowing them to downsize without financial penalty.
This reform could also help millions of younger homebuyers find a family home by allowing ‘empty nesters’ to move and increasing the supply of larger properties.
John Perks, managing director of LV= Retirement Solutions, said: “We’re calling for Government to scrap the unfairly high stamp duty costs for downsizing pensioners and provide a much-needed injection of larger homes into the market for the millions of families struggling to move up the ladder.
“By increasing the number of property sales, this could also increase Government’s stamp duty revenues in the long run, making it win-win for everyone.”