Conservative Party to Pledge Stamp Duty Cut for First-Time Buyers in Manifesto
In their upcoming manifesto, the Conservative Party has promised to reduce stamp duty for first-time buyers. The tax, which is currently applied to properties valued at over £250,000, ranges from 5% to 12% depending on the price. For first-time buyers, stamp duty is applicable for properties over £425,000, but this offer is set to expire in March 2022. The Tories aim to make the £425,000 threshold a permanent measure for new buyers.
The pledge to reduce stamp duty for first-time buyers is in line with the Conservatives’ previous stance on the tax. Under the leadership of Liz Truss, the party had increased the threshold for first-time buyers from £300,000 to £425,000. Additionally, the starting point for stamp duty on all other property transactions had been raised from £125,000 to £250,000, but this is also set to expire in March 2022. The cost of this move has not been disclosed, but reports suggest it could be around £1 billion. The Conservatives estimate that this tax cut will benefit approximately 200,000 households annually.
During a recent BBC election debate, Conservative candidate Penny Mordaunt emphasized the importance of reducing taxes for individuals. She stated, “The way to keep the recovery going is to give you more money in your pockets. That is why this election must be about us cutting your taxes.” Mordaunt also mentioned that the party has already begun implementing tax cuts and that more will be outlined in their manifesto next week. She stressed the need to alleviate the tax burden on individuals and businesses.
In a recent article, David Phillips, associate director of the Institute for Fiscal Studies, highlighted the negative impact of stamp duty on the economy. He stated that it is one of the most damaging taxes imposed by the government, as it increases the cost of moving and hinders the housing and labor market. Phillips suggested that instead of increasing the tax, it should be reduced or abolished altogether.
The Labour Party has also announced their plans to make the “freedom to buy” scheme a permanent fixture. This initiative allows the government to act as a guarantor for individuals seeking mortgages with a low deposit. Additionally, Labour leader Sir Keir Starmer has targeted planning reform as a means to increase housing supply and lower house prices.
As the election approaches, the focus on housing policies and tax reform is expected to intensify. With the Conservatives pledging to cut stamp duty for first-time buyers and Labour proposing their own measures, voters will have to weigh their options carefully before casting their ballots. Stay updated on all the latest election news by subscribing to the Sky News Daily podcast.