Labour to scrap stamp duty for FTBs

Labour leader Ed Milliband is today expected to announce that his party will scrap stamp duty on homes worth up to £300,000 for first-time buyers.

Warren Lewis
27th April 2015
ed

With only 10 days to go until the election, the various parties have been keen to use housing as one of the key battlegrounds of their campaigns.

In a speech in Stockton Mr Miliband is expected to say: “There’s nothing more British than the dream of home ownership, starting out in a place of your own.

But for so many young people today that dream is fading with more people than ever renting when they want to buy, new properties being snapped up before local people get a look-in, young families wondering if this country will ever work for them.

That is the condition of Britain today, a modern housing crisis which only a Labour government will tackle.”

Labour claims that the policy, which would come into force next year, could potentially benefit 700,000 first-time buyers in England and Wales. Those buying homes worth more than £300,000 would be liable to the full amount of stamp duty.

As it stands at the moment, buyers currently pay nothing on the first £125,000 of a home's value and are then charged on a sliding scale, starting with 2% on the next £125,000 and 5% on the following £675,000.

However, the move does not apply to Scotland, where Holyrood levies a land and buildings transactions tax on house sales and there is no special treatment for first time buyers.

Ed Balls backed Mr Miliband, saying: “A Labour Treasury after the election will tackle the housing crisis and back young people aspiring to buy their own home. The Tories have totally failed to deal with the housing crisis. Only a Labour government in two weeks’ time will turn this round with a plan to build more homes, back renters and give aspiring first-time buyers a leg up the ladder.”

Recently, the Tories dismissed Labour’s rent control plans as “drivel” saying the idea would actually suppress house building and see rents artificially inflated in advance, and spike every three years - insisting such market interventions had been ridiculed by economists.

Generation Rent director Alex Hilton warned: “Stopping landlords from making inflation-busting rent increases would make private renters more secure than they are in today’s wild west lettings market. But the proposals are still riddled with loopholes.Landlords can still kick out tenants after six months, they can still evict tenants by claiming they need to sell, and because there are no controls on rents between tenancies, that gives them an incentive to use those loopholes.”

Mark Hayward, managing director, National Association of Estate Agents comments: “This could be a real vote swinger for those looking to step on the housing ladder. Scrapping stamp duty for homes under the price of £300,000 would only mean good things for hopeful first time buyers (FTB). For many, hidden costs such as stamp duty can be the difference between being able to afford a home, and not being able to afford one. Our recent research showed that just under a third of house sales were made to first time buyers, and hopefully we’ll see this significantly increase over the next three years.”

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