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Housing News: Rishi Sunak weighing up stamp duty cut

Prime Minister Rishi Sunak is considering slashing stamp duty or abolishing inheritance tax in the next Conservative manifesto.

Sunak is under pressure after two byelection defeats in Mid Bedfordshire and Tamworth.

Political scientist and pollster Professor Sir John Curtice predicted that the Tories would face a heavier defeat than Tony Blair’s Labour in 1997.

Tinkering with stamp duty has been a common habit of the Conservatives.

When Sunak was Chancellor, he introduced a ‘stamp duty holiday’, initially on purchases up to £500,000, from March 2021 to September 2022.

Meanwhile, then-Chancellor George Osborne introduced the 3% stamp duty surcharge on investment purchases, which came into force in 2016.

As it stands, stamp duty is charged at a rate of 5% for a main residence bought for between £250,001-£925,000, rising to 10% between £925,001-£1,500,000.

Sunak froze income tax thresholds in 2021 for six years while chancellor.

The Times reported that the Conservatives plan to reduce stamp duty for their general election manifesto next year if the economy has strengthened.

A source told the newspaper the Tories are planning to cut stamp duty or abolish inheritance tax.

A senior Tory told the Times that reducing stamp duty would be “aspirational” and improve the economy and attract middle-class voters who had left the party.

Stamp duty in England and Northern Ireland is now 5% for a main residence bought for between £250,001-£925,000, rising to 10% for a property bought for £925,001-£1,500,000.

Meanwhile, the pressure to announce tax cuts before the next election has increased after figures showing government borrowing was lower than expected last month due to a large drop in the Treasury’s debt interest bill and strong tax receipts.

Official figures showed that public sector net borrowing was £14.3bn last month, lower than the £20.5bn that had been forecast by the Office for Budget Responsibility.

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