Proposals to make it easier for first-time buyers to access the housing ladder cleared their first hurdle in the Commons, but MPs doubt they will return for further scrutiny.
MPs voted 288 to 152, a majority of 136, to give the Stamp Duty Land Tax (Reduction) Bill a second reading.
But some have questioned whether the bill will survive Rishi Sunak’s coronation as Tory leader, with Labor and the Liberal Democrats suggesting a U-turn could await the legislation in the near future.
The bill is one of the few measures that survived Liz Truss’ mini-budget bonfire from the economic turmoil it caused, alongside the repeal of the National Insurance hike.
These stamp duty reductions will mean that approximately 43% of transactions each year will pay absolutely no stamp duty.
This would raise the threshold for non-payment of stamp duty on properties worth £125,000 to those worth £250,000.
Treasury Minister Felicity Buchan told the Commons the bill would also extend the ‘generosity’ of the stamp duty holiday during the Covid-19 pandemic ‘to ensure first-time home buyers pay zero duty stamp duty on purchases up to £425,000″.
She added: “The maximum purchase value for which first-time buyers can claim the relief has also been increased from £500,000 to £625,000.
“These stamp duty reductions will mean that approximately 43% of transactions each year will pay absolutely no stamp duty. This is up from 25% before the provisions of this bill.
“No one buying a second home or investing in a buy to let property will be exempt from paying stamp duty as the 3% surcharge on the purchase of additional accommodation will continue to apply.”
Ms Buchan told MPs the Bill will ‘enable more people to buy and move every year’, adding: ‘It will also mean more business for painters, decorators, removal companies, plumbers, electricians and all industries that depend on a healthy housing market.”
Shadow Treasury Minister James Murray has slammed the government for delaying the remaining stages of the bill, which were due to be considered on Monday evening.
He said: “This last-minute parliamentary business U-turn sends the message that it is open to the new Prime Minister and his Chancellor to change their minds on stamp duty changes.
“By delaying the remaining stages of the bill, the government has introduced even more uncertainty into the housing market, which is frankly the last thing anyone needs.”
Mr Murray told MPs that voting for the bill would not be ‘fair’ or ‘responsible’.
He added: “At a time when our economy is reeling from the long-term damage the Tories have caused, when current and future buyers are facing spiraling and prohibitive mortgage costs, and when we are still flying in the black as the Tories have refused to release the OBR forecast, now is not the time to spend £1.7billion a year on this tax cut.
Liberal Democrat MP Tim Farron told the Commons: ‘It is very difficult to support a proposal which is the only trailing survivor of a disastrous mini budget and it is suspected that the only reason it has survived is because the people who suffers are the people who live in communities that the government thinks it can take for granted. Well, they can’t, and they shouldn’t be allowed to.
The MP for Westmorland and Lonsdale added: ‘I fail to understand why the government is clinging to this proposal which will do so little good even for the people it will help, and which will cause so much harm to those to whom it will hurt, while she has the chance to think again.
“I urge them very strongly to do just that.”