The Conservative Party will try to win over first-time home buyers by vowing to scrap their stamp duty tax.
The pledge to permanently get rid of stamp duty tax for first-time buyers of properties costing up to £425,000 will be included in the party’s manifesto. Around 200,000 households would benefit from the change every year, with the Tories keen to declare that they are the true party of home ownership.
Stamp duty is the tax paid when someone buys a property in England and Northern Ireland. It is devolved to governments in Wales and Scotland, where it is called the Land Transaction Tax and the Land and Buildings Transaction Tax respectively.
The Conservative manifesto, expected to be published in the coming days, is seen as a key moment to win back momentum in the election race.
The new stamp duty plan would make permanent a policy first introduced in 2022 by Liz Truss during her brief tenure in No 10.
Ms Truss and her Chancellor Kwasi Kwarteng raised the property price threshold for not paying the tax from £300,000 to £425,000. However, the temporary measure was due to end in March 2025.
The plan to make it permanent could cost around £1 billion a year according to previous Treasury estimates, and it remains unclear how the policy would be funded.
The stamp duty move will be seen as a deliberate move from the Tories to win over voters frustrated by the difficulty of getting on the property-owning ladder. Jeremy Hunt, the Chancellor, is a known critic of stamp duty.
The pledge is also an attempt from the Tories to move election headlines away from Rishi Sunak‘s decision to leave D-Day commemorations early on Thursday.
It is also a response to Labour’s own first-time home-buyers policy announced this week.
Labour said it will make permanent a scheme designed to ensure low-deposit mortgages are available for first-time buyers if it wins the general election. Party leader Sir Keir Starmer said he wanted to “turn the dream of owning a home into a reality”.
However, the Institute for Fiscal Studies, a think tank, suggested that Labour’s mortgage guarantee scheme would only benefit high earners.