Minister for Finance Mr Simon Harris’s statement, today, that he has no plans to change stamp duty, raises a question; could targeted relief for people over 50 years, buying a smaller home and selling their larger family home, help ease housing pressures?
Ireland should perhaps consider removing stamp duty for people over 50 years old, who choose to buy a smaller home and sell their larger family home.
In 2025, total Stamp Duty receipts collected by the Irish Exchequer amounted to approximately €1.695 billion, representing only about 2% of the total net tax receipts for the year.
Some economists believe that this suggestion could make a useful contribution to easing housing pressures, including here in Co. Tipperary. It would help some homeowners move into accommodation that better suits their needs, while bringing larger homes into the market place, for families who need more space.
While it would not solve the housing crisis on its own, it could be a practical proposal worth examining and testing.
When the family home becomes larger than needed
For some parents, life changes considerably once their children grow up and move away. A house that once felt crowded can become much larger than they need.
There may be several spare bedrooms, a garden that takes considerable work, and more space to heat, clean and maintain. Some parents indeed would welcome a smaller, more manageable home, particularly if they could remain close to friends, family and familiar services.
Selling a larger house and buying a less expensive property could also release money for retirement or other needs.
Yes, moving also comes with costs. Solicitors’ fees, estate agents’ fees, removal expenses and stamp duty can all reduce future financial benefit, however removing stamp duty would take away one of those expected costs.
What difference could the saving make?
Under Ireland’s standard residential stamp-duty rates, the first €1 million of the purchase price is taxed at 1%. For an ordinary purchase of an existing smaller home, this means:
A €200,000 home carries €2,000 in stamp duty.
A €250,000 home carries €2,500 in stamp duty.
A €300,000 home carries €3,000 in stamp duty, A new-build home priced at €300,000 costs €2,595 because Stamp Duty is charged on the price minus the VAT.
These above examples assume no special relief applies.
A saving of a few thousand euro will not persuade everyone to move. But it could make a difference to someone already considering down-sizing, especially when added to the other expenses involved.
For example, a couple selling their larger house and buying an existing smaller home for €250,000 would save approximately €2,500 under a full exemption. That money could help pay for removals, legal costs or changes needed in their replacement home.
This is a proposal for a new relief, rather than a description of an existing general entitlement for people over 50.
How could it help other families seeking homes?
When a homeowner down-sizes and sells their larger house, that property then becomes available to another household.
A family living in a smaller home might buy it, potentially putting their own property up for sale. A first-time buyer might then have an opportunity to purchase that smaller property. The precise chain will vary, but one move can allow several households to find homes that suit them better.
There is an important limit: down-sizing does not, by itself, create an extra dwelling. The person selling the larger home still needs somewhere to live. The benefit is that existing homes can become better matched to the households occupying them.
That is useful, but it should not be confused with increasing the total number of homes.
How should the proposed relief work?
Economists would support a scheme with clear conditions linking the tax saving to a genuine move:
►The larger property must have been the applicant’s main home.
►The smaller replacement property must become their main home.
►The former home must be sold within a reasonable, clearly stated period.
►There should be a limit on the relief and rules preventing repeated claims or abuse.
►The scheme should accommodate people who need to buy before completing the sale of their previous home.
Putting the larger house on the market would start the process. Final entitlement should normally depend on completing the sale, with sensible provisions for genuine delays.
Relief could be provided through a refund after the sale, or conditionally at purchase with repayment required if the conditions are not met. An upfront arrangement would offer more immediate help, although it would need careful administration.
The meaning of “smaller” would also need a clear definition. A home with less floor space may cost more if it is newer, accessible or in a convenient location. Price alone would not be a reliable measure.
An over-50 threshold could be considered, but the Government should explain why that age is appropriate. Household needs differ, and similar support may also be justified for some younger people whose circumstances have changed.
Suitable smaller homes must be available.
The biggest practical question is where people would move?
A homeowner may be willing to down-size but unable to find a suitable property nearby. A tax saving will achieve little if the available homes are unaffordable, difficult to access or far from the person’s community.
For Tipperary and other counties, economists appear to recommend combining the proposed relief with:
► More accessible smaller houses and apartments near shops, healthcare and transport.
► Renovation of vacant and derelict properties that can become safe, comfortable homes.
► Practical moving advice and limited help with essential costs for households with low incomes.
► More social, affordable and rental housing, alongside the infrastructure needed to support construction.
The aim should be to make a wanted move easier. Parents may still need space for visiting children, grandchildren or care arrangements.
Would it be a solution to the housing crisis?
This could be one useful measure within a wider housing programme. It has a clear purpose; reducing a moving cost for people willing to release a larger home for sale.
However, the scale of the benefit is uncertain. Some recipients would have moved without the relief. More buyers seeking smaller properties could increase competition for those homes, and sellers could capture part of the tax saving through higher prices.
A time-limited pilot would help establish whether the scheme encourages additional moves and represents good value for public money. Its success should be measured by completed moves, larger homes released for sale and the cost of achieving those results.
People would welcome a serious examination of this proposal. Helping people move into homes that suit their changing lives could benefit both the sellers and the families who buy their former homes, while Ireland continues the essential work of building and restoring more housing.
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