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Tories mull stamp duty cut in 'pre-election giveaway'

Tories mull stamp duty cut in 'pre-election giveaway'
Anna Sagar
Written By:
Anna Sagar

The Government is considering lowering stamp duty in the Autumn Statement as part of its bid to garner more support ahead of the general election, a report suggests.

According to a report in The Times, the Treasury is looking to move the threshold at which people start paying stamp duty from £250,000 to £300,000.

This would cost around £3bn per year by 2028-29 and would mean almost half of all people buying homes would pay no stamp duty, saving up to £2,500.

The current rate of stamp duty from £250,000 to £925,000 is 5% of the property or lease premium or transfer value, then 10% for £925,001 to £1.5m and 12% above £1.5m.

The report noted that stamp duty plans, which were heavily rumoured to be in the Spring Budget statement, were removed due to concerns that lowering stamp duty fuels inflation.

Government officials are now allegedly reconsidering a change as a “pre-election giveaway”, as inflation is expected to be lower later in the year.

The report suggested that Chancellor Jeremy Hunt had started discussions with senior officials about the date of the Autumn Statement to give sufficient time to the Office for Budget Responsibility (OBR).

In the Spring Budget, Hunt scrapped multiple dwellings stamp duty relief as well as stamp duty for nominee purchasers.

Many mortgage industry figures said that the changes did not go far enough, with some calling for downsizer stamp duty to be abolished, better regional variation and an examination of buy-to-let (BTL) stamp duty.

A poll by YourMoney.com‘s sister title Mortgage Solutions showed that 31% of brokers said that stamp duty reform is most needed for downsizers and BTL landlords respectively.

Only 21% said that stamp duty reform was needed for first-time buyers, followed by second steppers at 17%.