Rishi Sunak vows to axe stamp duty for thousands of first-time buyers

8 June 2024, 08:31 | Updated: 8 June 2024, 08:37

Prime Minister Rishi Sunak has pledged to axe stamp duty for first-time buyers
Prime Minister Rishi Sunak has pledged to axe stamp duty for first-time buyers. Picture: Alamy

By Emma Soteriou

Rishi Sunak has pledged to axe stamp duty on homes up to £425,000 for first-time buyers, if the Tories win the General Election.

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Stamp duty land tax currently applies to sales over £250,000 - but will fall to £125,000 from March next year due to the end of a "temporary" relief period.

It means the levy will apply to cheaper - and likely a greater number of - purchases.

The proposed change for first-time buyers would see around 200,000 households benefit from the change every year, according to the Telegraph.

It comes ahead of the Conservatives' manifesto reveal next week, building on plans from former PM Liz Truss' Growth Commission.

In the mini-Budget, Ms Truss and then-chancellor Kwasi Kwarteng raised the threshold property price from £300,000 to £425,000 for first-time buyers.

It is unclear how much it will cost to extend the policy past March 2025, but previous Treasury estimates suggest it could be around £1 billion a year.

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The move comes in a bid to win over younger voters.

However, there have been calls for the party to go a step further and propose the abolition of stamp duty altogether.

Institute for Fiscal Studies associate director David Phillips said: "It is one of the most economically damaging taxes levied by the government, significantly increasing the cost of moving and gumming up both the housing and labour market."

Chancellor Jeremy Hunt previously said the Conservatives would not increase capital gains tax, stamp duty or the number of council tax bands, or "undertake an expensive council tax revaluation".

The PM is understood to have decided against a promise to cut inheritance tax - a policy popular with older voters - but changes to the manifesto could still take place before it is unveiled.

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It comes after Labour said it will help 80,000 people buy homes over the next five years with a permanent mortgage guarantee scheme.

The party said its 'freedom to buy' scheme would replace an existing mortgage guarantee programme that is due to run out in a year's time.

Labour said the existing scheme has never been properly integrated into the wider mortgage landscape by lenders, and is considered "peripheral".

It comes as part of a broader housing offering to voters, which includes a pledge to build 1.5 million homes over the next five years, a promise to give local people a chance to buy new homes near them first, a tax on foreign buyers, and reforming compulsory purchase rules.

Labour leader Sir Keir warned: "A generation face becoming renters for life."

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