Joy for home-buyers as Tories pledge stamp duty axe in manifesto – check to see if you will qualify
RISHI Sunak has pledged to effectively abolish stamp duty for first-time buyers in the Conservative manifesto – with up to 200,000 Brits set to benefit.
Renters looking to take the first step onto the property ladder will dodge paying the property tax on homes bought for under £425,000 with current relief measures made permanent.
Stamp duty is currently paid on homes worth more than £250,000 with the rate ranging from five per cent to 12 per cent of the price depending on the value of the property.
The special threshold for first-time buyers was temporarily raised from £300,000 to £425,000 by Liz Truss in the September 2022 mini-budget but the measure had been due to expire next March.
But the PM today pledged to keep the raised threshold for good – potentially saving Brits £1billion a year – if the Tories are elected on July 4.
The tax cut is another move in a bid by the PM to inject life into the Tory campaign and win over younger swing voters in key constituencies.
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With the average price of a first home at around £300,000, the measure will effectively end the tax for young professionals purchasing their first property.
Each pound from the next £500,000 above £425,000 will still be taxed at five per cent.
How much could you save?
How much you will save from the cut to stamp duty depends on how much the house costs - but it could be thousands of pounds.
Here's how much first-time buyers will save:
£100,000 - no saving
£200,000 - no saving
£300,000 - no saving
£400,000 - £5,000
£500,000 - £6,250
First-time buyers already paid no stamp duty on the first £300,000 of the price of a property.
This means looking at a property at this price or below will see no change.
But those looking to buy a property at £400,000 will now pay no stamp duty and will save £5,000.
First-time buyers looking to purchase a home at £500,000 will now save £6,250.
Here's how much homeowners looking to buy a new property will save:
£100,000 - no saving
£200,000 - £1,500
£300,000 - £2,500
£400,000 - £2,500
£500,000 - £2,500
Homeowners looking to buy a second home are also set to benefit.
The government doubled the stamp duty threshold to £250,000 for all home purchases.
This means someone looking to buy a property at this price will now pay no stamp duty, saving £1,500.
Someone looking to buy a property priced between £300,000 and £500,000 will save £2,500.
Speaking in last week’s BBC election debate, Conservative candidate Penny Mordaunt appeared to tease the move, saying: "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".
She added: "You'll see more in our manifesto next week.
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“We have got to cut people's taxes and we have got to alleviate burdens on business."
David Phillips, an associate director at the Institute for Fiscal Studies, previously called for the abolition of stamp duty.
He said: “It is one of the most economically damaging taxes levied by the government, significantly increasing the cost of moving up both the housing and labour market.
"It should not be increased - rather it should be reduced or, ideally, abolished."
