The Conservative Party will pledge to cut stamp duty for first-time buyers as part of its manifesto.
The levy is currently paid on property purchases worth more than £250,000 – with the rate ranging from 5% to 12% of the ticket price, increasing as the price rises.
For people purchasing their first home, stamp duty kicks in on properties worth £425,000 – although this offer is set to expire in March next year. The Tories want to make the £425,000 floor permanent for new buyers.
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The tax has previously been singled out as an area that Conservatives want to reduce.
The £425,000 floor for first-time buyers was introduced by Liz Truss, a rise from £300,000.
She also raised the starting line for stamp duty on all other property transactions from £125,000 to £250,000 – although this is also set to revert in March next year.
It has not been said how much the move would cost – although there are reports it would be as much as £1bn.
The Conservatives are hoping the tax pledge will benefit around 200,000 households every year.
Speaking in a BBC election debate, Conservative candidate Penny Mordaunt said: “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.”
She added that the Tories “have already started doing that and you’ve already heard some announcements”.
“You’ll see more in our manifesto next week,” she added. “We have got to cut people’s taxes and we have got to alleviate burdens on business.”
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Writing earlier this week before the announcement, David Phillips, an associate director of the Institute for Fiscal Studies, wrote that stamp duty “is one of the most economically damaging taxes levied by the government”.
He added that it is “significantly increasing the cost of moving and gumming up both the housing and labour market”.
“It should not be increased – rather it should be reduced or, ideally, abolished.”
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Labour has previously announced its plans to make permanent the “freedom to buy” scheme.
This sees the government act as a guarantor for people seeking mortgages with a low deposit.
Sir Keir Starmer has also targeted planning reform as a way to build more homes and bring down house prices.
Source Agencies
