Ed Miliband will reveal today the housing changes his party propose. These include not charging Stamp Duty for first time buyers on homes up to £300,000, higher taxes for foreign buyers and up to half of new builds being reserved for local residents.
For those buying their first home, £0 Stamp Duty will benefit nine out of ten people and could save £5,000. Labour announced that this plan would cost £225m per year, which will be funded through tax-related measures.
Miliband will say: “There’s nothing more British than the dream of homeownership, starting out in a place of your own. But for so many young people today that dream is fading with more people than ever renting when they want to buy, new properties being snapped up before local people get a look-in, young families wondering if this country will ever work for them.
“That is the condition of Britain today, a modern housing crisis which only a Labour government will tackle.”
Labour also plan to change planning laws that will give priority to first time buyers who have lived in an area for over three years for new local homes. The local first policy will also stop properties being advertised overseas before they’ve been showcased in the UK.
Currently, under George Osborne’s reforms, buyers do not pay Stamp Duty on the first £125,000 of their property’s value and then pay 2% on the next £125,000 and 5% on the following £675,000.
Labour hope to fund their Stamp Duty plans by targeting tax-avoiding landlords, which costs around £550m per year. They will introduce a national register of landlords and cut that figure by 20%. This would create a £100m Treasury fund.
Holding companies that purchase properties for investors would also be tackled with an annual tax increase on enveloped dwellings. Buyers from outside the European Union will be hit by a 3% rise to their Stamp Duty.
Miliband will add: “For the first three years of the next Labour government, we will abolish Stamp Duty for all first time buyers of homes under £300,000. We will start construction of one million homes over the next five years, so at least 200,000 homes a year are getting built by the end of the Parliament with a new generation of towns, garden cities and suburbs, unlocking land being hoarded by large developers, telling them either you use the land, or you lose the land.”1
Local authorities will have the power to charge 100% more Council Tax on properties left empty for a year. Miliband hopes to tackle the private rental sector by introducing rent controls.
Shadow Chancellor, Ed Balls, says: “A Labour Treasury after the election will tackle the housing crisis and back young people aspiring to buy their own home.
“Our fully-funded plan will slash Stamp Duty to zero for first time buyers on properties up to £300,000. This will save money that can instead be put towards a deposit and all the other costs that mount up when you buy a home. And we’ll get more affordable homes built too, with the biggest house-building programme in a generation.”1