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Abolish stamp duty for downsizing, major Tory group tells Chancellor ahead of Budget

Abolish stamp duty for those downsizing to help young people onto the housing ladder, a major group of moderate Tory MPs has urged
Abolish stamp duty for those downsizing to help young people onto the housing ladder, a major group of moderate Tory MPs has urged - Jordi Salas/Moment RF

Abolish stamp duty for those downsizing to help young people onto the housing ladder, a major group of moderate Tory MPs has urged ahead of the Spring Budget.

The One Nation Caucus, which represents 107 Conservative MPs, told Jeremy Hunt that he should look to “free up” housing stock by scrapping the tax for buyers looking to downsize.

They have also urged the Chancellor to use next week’s Budget to allow first-time buyers to put 25 per cent of their tax free pension savings towards their deposits.

Damian Green, chairman of the One Nation Caucus, vice chairman Matt Warman and senior member Stephen Hammond, said that the measures could be paid for with a levy on foreign owners of luxury flats as investments.

Writing for The Telegraph online, they said: “With the tax burden at the highest rate in over 70 years and getting on the housing ladder seeming ever more out of reach, young people are having a harder time than ever.

“Home ownership has always been a core Conservative mission, but these days even leaving your parents’ home to rent somewhere is impossible for too many.”

They said that the proposal to scrap stamp duty for buyers who are downsizing had been “stymied by suggestions it is too hard for too long,” as they urged the Chancellor to consider it.

Damian Green is among MPs calling for a raft of new measures in the Spring Budget
Damian Green is among MPs calling for a raft of new measures in the Spring Budget - Heathcliff O'Malley/Heathcliff O'Malley

The MPs said that foreign owners of luxury flats, purchased as investments, “represent too much of the market, especially in London” - and that a levy should be introduced to help pay for their proposals.

To tackle the issue of supply, the group repeated their calls to Mr Hunt ahead of last year’s Autumn Statement to reward local authorities for meeting their advisory house-building targets.

For those authorities that build and sell 100 per cent of their targets over the next four years, they should receive 15 per cent of the stamp duty generated, according to the group, with the reward increased to 25 per cent if they exceed 125 per cent of their targets.

Earlier this month, Michael Gove, the Housing Secretary, warned in an interview that young people will abandon democracy and capitalism if they cannot buy their own homes.

He told The Times earlier this month: “It’s simply harder for us to make that case if people who’ve got broadly small ‘c’ conservative values, or actually no particular political agenda at all, feel that they’re being shut out.”

As Mr Hunt faced calls for measures to help first-time buyers in the Budget, Treasury officials were reportedly looking at plans to allow 99 per cent mortgages on first homes, therefore only requiring a one per cent deposit.

The current Government mortgage scheme helps buyers who have a five per cent deposit at a minimum.

The One Nation group has also asked Mr Hunt to commit to a multi-year settlement for childcare funding and a guarantee for graduates that they do not have to pay higher rates for interest on their loans than the average commercially available level.


Next month’s Budget gives Jeremy Hunt the chance to show the country how a responsible, pragmatic Conservative Government is on your side and can keep us on the path to recovery. Whether you’re a new parent, a student, an employee or someone navigating the housing ladder, the Government should use this Budget to make clear we’re on your side, write Damian Green, Matt Warman and Stephen Hammond.

As One Nation Conservatives, we’re confident that the policy ideas we’re putting forward will allow the Chancellor to seize the opportunity to remind voters that Labour isn’t the answer.

Our suggestions represent a plan for four fundamental aspects of everyday life: childcare, education, housing and taxation. The Government’s landmark childcare reforms are a huge step forward, and represent a major shift for millions of working parents. When fully rolled out, they will provide a reliable form of childcare that does not disincentivise parents from returning to the workforce.

The Government has already provided nurseries with clarity on how much it will pay up until 2025, but not yet all of it. Our ask is simple: commit to a multi-year settlement for childcare funding, linked to the increasing costs providers face and give them the certainty they, and parents, need until they no longer require these services.

We should all be proud of the unprecedented rise in school standards and the rebalancing of post-16 education that this Conservative Government has overseen since 2010. However, undoing Labour’s arbitrary obsession with university numbers has left graduates straddled with thousands of pounds of debt, subject to punitive rates of interest. It isn’t feasible to write off all this debt – but either committing to ensuring that no graduate pays higher interest rates than the average commercially available level, or retrospectively moving graduates onto the latest loan plan, with lower interest rates, would be a start to reducing the burden placed on millions.

As those graduates and apprentices enter the workforce, it’s housing and taxation that rightly come to the fore: with the tax burden at the highest rate in over 70 years and getting on the housing ladder seeming out of reach, young people are having a harder time than ever. Home ownership has always been a core Conservative mission, but these days even leaving your parents’ home to rent somewhere is impossible for too many.

It is universally acknowledged that we need to build more houses. This means looking at supply side measures, including Michael Gove’s recent announcement to turbocharge development on brownfield sites, as well as demand-side issues.

We’ll never address these without action at a local level. As we called for in the Autumn Statement, the Chancellor should reward local authorities who build and sell 100% of their advisory targets, over the next four years, with 15% of the stamp duty generated. If this figure exceeds 125%, they should keep 25%.

Besides building homes, saving for a mortgage deposit has become increasingly difficult. In an age where the average mortgage is nine times the average salary, individuals should be enabled to use other assets, such as pensions, to get on the property ladder. Once again, we are calling on the Chancellor to allow first time buyers to put up to 25% of their tax free pension savings into the deposit for their first-time home.

He should also look to free up stock by abolishing stamp duty for buyers who are downsizing, a measure that has been stymied by suggestions it is too hard for too long.

We would recommend helping pay for these with a levy on foreign owners of luxury flats, bought for investment purposes, as these represent too much of the market, especially in London.

Looking at general taxation, we believe that any tax cuts should be aimed at ordinary, hard working people and businesses, much like the National Insurance cut and the extension of full expensing, which the One Nation Group called for and the Chancellor announced in November. We do not believe cutting inheritance tax is the solution.

Instead, he should use his additional headroom to extend the National Insurance cut and introduce other beneficial measures such as raising the tax thresholds in line with inflation over the next five years, or cutting the basic rate of income tax.

We believe that the Chancellor should start to introduce measures to rebalance tax and simplify the whole system, including by taxing all income at the same rate, regardless of source, whether earnings, benefits, or dividends. This would streamline the tax regime and have the dual benefit of reducing red tape and incentives to avoid tax. The tax regime would be demonstrably fairer, more progressive and help reduce in-work poverty. The UK’s economy would be more economically efficient and help productivity rise.

Taken together, these measures put forward a One Nation vision that seeks to address the crucial sense that so many voters express to their MP. We want everyone across the country, from new parents to those newly employed, struggling against the cost of living crisis, or aspiring to own their homes and build a better future, to know that these missions still lie at the heart of the Conservative Party. Everyone would pay the price of a Labour government and so we all need this Budget to deliver.