10 June 2024

Rishi Sunak to offer help to first-time buyers and tax cuts in Tory manifesto

10 June 2024

Rishi Sunak has pledged a tax break for landlords and help for first-time buyers as he prepares to launch the Conservative Party manifesto.

The Prime Minister’s offer will include a 100% relief on capital gains tax liability for landlords who sell to their existing tenants, claiming the move will be “transformational”.

Mr Sunak, who acknowledged during a BBC interview that it has become harder for people to own their first home under the Conservatives, will also pledge to abolish stamp duty up to the value of £425,000 for first-time buyers and launch a “new and improved” Help to Buy scheme.

The Conservative leader has also said tax cuts will be included in the manifesto, with reports suggesting another 2p cut to national insurance.

Labour predicted the Tory manifesto will be the “most expensive panic attack in history”.

Mr Sunak’s speech is expected to see him draw upon the spirit of Margaret Thatcher, who introduced the right-to-buy scheme which led to a sell-off of council homes, and her tax-cutting chancellor Nigel Lawson.

The manifesto launch on Tuesday comes after a bruising few days in the campaign in which Mr Sunak dismissed resignation rumours amid the ongoing fallout over his early departure from D-Day commemorations.

With Labour enjoying a strong lead over the Tories in the opinion polls, and with Nigel Farage’s Reform UK hoping to appeal to Tory voters, Mr Sunak will aim to improve his party’s outlook with the release of his pledges.

Writing for The Daily Telegraph, Mr Sunak said: “Owning a home makes people more financially secure, gives them a stake in society and, as Mrs Thatcher said, is one of the main bulwarks of individual freedom.

“People should have the chance to buy their own home – it goes to the foundations of what we believe as Conservatives: we are the party of the property-owning democracy.”

Mr Sunak said a temporary increase of the stamp duty threshold to £425,000 had helped more than 200,000 first-time buyers in a 12-month period, adding: “We Conservatives believe in tax cuts, so we will abolish stamp duty up to the value of £425,000 for first-time buyers, making the temporary rise in the threshold permanent and giving thousands more home-buyers tax relief.

“Secondly, we will launch a brand new and improved Help to Buy scheme to help a new generation on to the property ladder. With our new scheme, we will provide an equity loan of up to 20% towards the cost of a new build home. We will also give first-time buyers a 5% deposit on terms they can afford.

“This will be transformational for those on the brink of home ownership but who need a helping hand to get there. We will help these people to become owners.”

Mr Sunak added: “Thirdly, we will introduce a tax relief for landlords who sell to their existing tenants.

“This will incentivise landlords to give tenants a chance to own the home they live in with a 100% relief on their capital gains tax liability. It is good for landlords and transformational for tenants.”

Mr Sunak is expected to use his speech on Tuesday to say the Conservatives had to take “difficult decisions because of Covid” before adding: “But we are now cutting taxes for earners, parents and pensioners.

“We are the party of Margaret Thatcher and Nigel Lawson, a party, unlike Labour, that believes in sound money.”

Figures provided by the Organisation for Economic Co-operation and Development (OECD) have previously showed the UK’s current level of tax burden is the highest on record.

Statistics published late last year showed tax hit 35.3% of gross domestic product in 2022/23, a 0.9% increase on the previous year. This ratio is forecast to grow to 37.7% by 2029, with the Government’s freeze on tax ratios the dominant driver.

Their manifesto will be the most expensive panic attack in history

The Tories have previously pledged no increases to income tax, national insurance or VAT. They have also promised to increase the income tax personal allowance for pensioners – giving them a tax cut worth around £95 in 2025-26, rising to £275 in 2029-30.

Mandatory national service for 18-year-olds was among the first pledges by Mr Sunak and would require teenagers to choose between taking a 12-month placement in the armed forces or “volunteer” work in their community one weekend a month for a year.

Pat McFadden, Labour’s national campaign co-ordinator, said: “The one thing to know about the desperate series of unfunded commitments in the Tory manifesto is that the money’s not there.

“Their manifesto will be the most expensive panic attack in history. The Tories’ scattergun and unfunded commitments have racked up billions with no idea from them of how to pay for it.

“They used to care about economic credibility. Now, in their desperation, they spend every day torching whatever remnants of it they had left.”

Earlier on Monday, Mr Sunak responded to criticism of his early exit from the 80th anniversary of the Normandy landings.

Asked whether resigning had crossed his mind, Mr Sunak told broadcasters during a visit to the Dog and Bacon pub in Horsham: “No, of course not. I’m energised about the vision that we’re putting forward for the country.”

Elsewhere, children under the age of 16 would be banned from buying highly caffeinated energy drinks under a Labour government.

Labour leader Sir Keir Starmer said the sale of drinks containing more than 150mg of caffeine per litre to under-16s is “not justifiable or acceptable”, adding: “We’ll stop it. I will always take the tough decisions necessary to keep our children healthy.”

It comes as Labour pushes its “child health action plan”, which includes creating an extra 100,000 urgent dental appointments for children in a bid to clear backlogs in England.

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