The crossbench peer has called on Philip Hammond to follow-up his announcement in last year’s Autumn Budget that first-time buyers would pay no stamp duty on homes costing less than £300,000 with a similar move for over-65s.
Currently, stamp duty is applied at zero per cent for the first £125,000 of a house purchase, two per cent for the next £125,000 and five per cent for the next £675,000.
But according to Lord Best, who has written a number of reports for Ministers on housing an ageing population, abolishing the tax for pensioners would ultimately bring in more funds for the tax-payer.
He told The Yorkshire Post: “The Treasury gets more money because there is a chain of people who also move and have to pay stamp duty.
“I think they might buy it, it is a nice easy one for them and you can do the sums. You get two-and-a-half moves as well as the older person’s move, on average, and you work out the gain, which is more than the loss.
“If you are down-sizing you are probably going to take some cash out of the deal, so you are going to buy somewhere worth less than the place you are selling.
“They are not getting any stamp duty from you buying the cheaper place, but the person buying your place, which is more valuable, you get the full stamp duty on that. If you don’t move and just rattle around there, they never would have got that.”
Lord Best, who lives near Tadcaster, said that by ending stamp duty and making it easier for pensioners to move house, often to be nearer their families, it was less likely that older people would remain in unsuitable large homes.
This would mean fewer problems in their old age caused by accidents, resulting in less pressure on the NHS and social care.
He added: “If you get in a helicopter over Harrogate, all of the housing is three-bedroom housing with gardens, though there are some small blocks of flats.
“If you take your helicopter and keep going to Penzance, England is three-bedroom houses, a lot of these are occupied by two or one person and that is OK when they are 65, not so good when they are 75 and hopeless when they are 85.
“What they need to think about is don’t wait for a crisis, move now when you can and free up these houses for the next generation.”
Yesterday, MP Boris Johnson demanded that stamp duty should be cut to prevent property developers forming an ‘oligopoly’ over the housing market,
The former foreign secretary said young people are being prevented from getting on the housing ladder because of the ‘absurdly high’ levy.