A survey by equity release adviser, Key, discovered 8% of those looking to downsize would be incentivised if the tax were to be scrapped to people on this stage of the property ladder.
The research comes as the Royal Institution of Chartered Surveyors (RICS) revealed support for cuts in stamp duty to help downsizers and following calls for the reform of property taxes ahead of the Budget.
There is widespread support for the abolition, with 63% of estate agents welcoming a stamp duty demise for older homeowners making a final house purchase, said Key.
But while 8% of homeowners said they would ‘definitely’ consider moving if they could avoid stamp duty, 32% said the tax was not a barrier to downsizing. A further 37% said it would have no impact on them.
Will Hale, CEO at Key said: “While making changes to stamp duty is likely to appeal to some over-65s, downsizing can be more complex than anticipated so a move like this could only be part of wider solution. “
Key’s research revealed the equivalent of around 620,000 over-65s had looked at downsizing but couldn’t find a suitable home.
Meanwhile another 500,000 had done the sums and found out they wouldn’t make enough money to justify this type of upheaval.
Hale added: “When we speak to customers, we find that they are often very attached to their home and their neighbourhood so downsizing is not something they want to consider.
“And, if they do consider it, they may well want to take equity release out on their new house as they haven’t made as much as they hoped or they want to make some improvements to make it feel like home.
“When making these choices, it is vital that they get independent specialist advice as it will help them to fully understand all their options.
”Making changes to the stamp duty regime would only solve some of the issues that the housing market and the older generation is facing.
“Serious thought needs to go into this to ensure that we do not create a situation whereby people are pushed into doing something that is not actually in their best financial, emotional and social interests. Guiding customers through their options at this potentially difficult time is critical.”
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