Tories plot tax cut for wealthy and much-needed help for first-time buyers

27 December 2023 , 08:51

842     0

The Tories are trailing about 20 points behind Labour in the polls (Image: AFP via Getty Images)

The Tories are plotting attention-grabbing pledges on housing and taxes as Rishi Sunak struggles to turn around his party's major deficit in the polls.

The PM is considering scrapping inheritance tax for the richest families in a bid to turn voters to his party. The tax was only paid by around 4% of estates in 2021 as it only applies on estates worth £325,000 or more. This rises to £500,000 if a home is given to a child or grandchild.

Chancellor Jeremy Hunt reportedly looked at plans to halve the 40% rate of the tax in his Autumn Statement in November but ended up holding off. The Institute for Fiscal Studies has previously said the cost of abolishing inheritance tax completely - a possible Tory election manifesto policy - would cost £7billion.

Hardline Tory MPs are now pressuring Mr Hunt to scrap the tax in the Spring Budget, which is expected in March. No10 is again considering slashing the tax ahead of the election as the Tories continue to trail about 20 points behind Labour in the polls, according to the Telegraph.

Meanwhile Housing Secretary Michael Gove has suggested that the Conservatives will promise to cut the up-front cost of a home for first-time buyers in a pre-election giveaway.

Teachers, civil servants and train drivers walk out in biggest strike in decade

Ministers are said to be considering Government support for longer fixed-term mortgages to reduce the size of deposits for first-time buyers. A resurrected help-to-buy scheme was also said to be on the table for the Spring Budget or the Conservative election manifesto. Asked by the Times whether the Conservatives would be able to go into the election expected next year promising more help for first-time buyers, Mr Gove said: "Oh, yes, we must. Definitely."

Mortgage rates surged in the wake of former Prime Minister Liz Truss’s bungled mini-Budget last year. They had already been on the rise after a wave of interest hikes by the Bank of England to cool inflation.

Sophie Huskisson