Tories claim first-time buyers will be ‘hammered’ by stamp duty under Labour

The Conservatives have said Labour not matching their commitments on housing will amount to a “first-time buyer tax” for those trying to get on the property ladder.

In their manifesto the Tories promise to deliver 1.6 million homes and permanently abolish stamp duty for homes up to £425,000 for first-time buyers.

They also pledge to introduce a new Help to Buy scheme with 5% deposits, as part of measures aiming to save first-time buyers thousands in upfront costs.

The Conservatives have claimed that by failing to back the plans in their manifesto, a Labour government would increase stamp duty for first-time buyers from next April.

Rishi Sunak visit to West Midlands
Prime Minister Rishi Sunak has a cup of tea with home-owner Jennifer Norton during a visit to Rednal, near Birmingham, in July 2023 (Ben Birchall/PA)

The party claims that, assuming a similar number of transactions next year as in 2022/23, this would mean more than 200,000 buyers will see an average tax increase of £3,500 when they purchase their first home under Labour.

The Labour manifesto’s only reference to stamp duty is that the party would use revenue from increasing stamp duty on purchases of residential property by non-UK residents by 1% to appoint 300 new planning officers.

Housing Secretary Michael Gove, who is not standing for re-election, said the Conservatives have a “clear plan” to help young people get on the housing ladder.

He said: “Labour’s unfunded spending commitments mean they will raise taxes for every working household by £2,094.

“That includes hammering hundreds of thousands of first-time buyers with a massive stamp duty increase from next April, as well as plans to hit people’s savings with a suite of taxes that will erode the money saved for a deposit.

“That’s the choice at this election – between the Conservatives, who will cut taxes and help you get the keys to your first home, and Labour, who will lock a generation of families out of home-ownership and take us back to square one.”

General Election campaign 2024
Housing Secretary Michael Gove said the Conservatives have a ‘clear plan’ to help young people get on the housing ladder (Dominic Lipinski/PA)

The Tories’ “plan for home-ownership” will, the party maintains, help hundreds of thousands on to the property ladder.

The package includes raising the thresholds for paying any stamp duty to £425,000 from £300,000 for first-time buyers and raising the thresholds for accessing stamp duty relief to £625,000 from £500,000 for first-time buyers.

It also pledges to reform EU “red tape” and “look at” creating a tax incentive for developers to build on brownfield sites that have laid dormant for years.

On Wednesday, as official figures showed a return to 2% inflation for the first time in almost three years, Prime Minister Rishi Sunak insisted the milestone shows the economy has “turned the corner”.

The latest data also showed the Consumer Prices Index measure of inflation including housing costs (CPIH) fell to 2.8% in May from 3% in April, while the Retail Prices Index (RPI) fell back to 3% from 3.3%.

A Labour spokesman said: “This reeks of desperation from the Tories.

“Jeremy Hunt has admitted the Conservatives’ tax cuts are completely unfunded, which will risk putting mortgages up again by £4,800.

“Over 14 years, the Tories have completely failed on housing, and homeownership has become a pipedream for most working families.

“Rishi Sunak has himself admitted it has become ‘harder’ to own a home under his government and no amount of baseless mudslinging can alter that fact.

“Labour will turn the page on this Conservative chaos.

“Our plans will get Britain building and help working families onto the housing ladder, with first dibs for first-time buyers and a new Freedom to Buy mortgage guarantee scheme.”