Prime Minister Rishi Sunak is expected to pledge a permanent elimination of stamp duty for first-time buyers purchasing properties up to £425,000, as part of the
Conservative manifesto. This tax is currently levied on property purchases in England and Northern Ireland.
The nil-rate threshold for First-Time Buyers’ Relief, set at £425,000, is scheduled to expire at the end of March next year. The proposed policy aims to provide lasting relief to first-time buyers.
This announcement follows a recent controversy surrounding the prime minister’s early departure from the D-Day commemorations on Thursday. In a televised debate on Friday, Conservative Cabinet Minister Penny Mordaunt criticized Sunak's decision as "completely wrong."
While the upcoming Conservative manifesto is not expected to include a pledge on inheritance tax, Sunak will commit to scrapping National Insurance when financially feasible—a promise previously made by Chancellor Jeremy Hunt. Labour has criticized this as an "unfunded pledge."
The Labour Party and the Liberal Democrats are also set to release their manifestos next week, with the Scottish National Party’s prospectus expected the following week.
Stamp duty, known as Land Transaction Tax in Wales and Land and Buildings Transaction Tax in Scotland, is managed by the devolved governments.
The stamp duty cut for first-time buyers was initially introduced in 2022 by then-Prime Minister Liz Truss. At that time, Chancellor Kwasi Kwarteng stated that the change would exempt 200,000 people from paying stamp duty. Additionally, the threshold at which other buyers begin paying the tax was increased from £125,000 to £250,000.
The current stamp duty rates are as follows:
0% on properties up to £250,000 (or £425,000 for first-time buyers)
5% on properties between £250,000 and £925,000
10% on properties between £925,000 and £1,500,000
12% on properties over £1,500,000
During the Covid-19 pandemic, a stamp duty holiday was implemented to support home buyers financially impacted by the crisis. The average house price in the UK is around £260,000.
In the fiscal year 2021/22, stamp duty generated approximately £14.1 billion, with residential properties accounting for three-quarters of this total.