Will Hammond slash stamp duty for first-time buyers?
STAMP duty could be slashed for firsttime buyers under plans being considered for next month’s Budget.
Philip Hammond is examining proposals put forward by London Tories to reduce stamp duty for those buying their first home in a bid to show the Government is on the side of the young.
Supporters believe the move would attract aspirational voters and restore the Tories’ image as the party of home ownership.
Properties costing less than £125,000 are already exempt from stamp duty, meaning first-time buyers purchasing starter homes in some areas of the country pay little or nothing.
But in areas where house prices have boomed in recent years, stamp duty can be a major additional factor for those buying their first property.
In London, where new entrants to the property market pay an average £428,546, buyers are left with a stamp duty bill of almost £11,500.
On an average English property value of £243,220, stamp duty of £2,364 is pay- able. A Tory source said: ‘The Budget is a good opportunity to seize the political initiative domestically through bold measures on issues like housing.
‘A stamp duty cut for first-time buyers would help.’
However, history suggests any move to cut stamp duty would also have to be accompanied by measures to boost housing supply.
Treasury analysis of previous stamp duty cuts and holidays has cast doubt on their effectiveness, with some studies suggesting the main effect was to drive up prices.
Mr Hammond has asked Tory MPs to submit ‘bold’ ideas for attracting younger voters in the wake of this year’s election.
Home ownership is seen as a key driver of Tory support and ministers have been alarmed by studies suggesting the average age of a firsttime buyer could rise to 41 within the next decade.