Tories would scrap stamp duty on £250,000 homes

The Welsh Conservatives say they will scrap stamp duty for all properties worth up to £250,000 if they win power in the 2016 assembly election.

Stamp duty is charged at 1% of the price of a property sold for between £125,000 and £250,000, with control of the tax to be devolved.

Tories said the policy costing £20m would boost the housing market.

The Welsh government said it would announce stamp duty proposals when they were "fully costed and developed".

Welsh Conservative Leader Andrew RT Davies said it was most people's dream to own their own home.

A buyer would save £1,600 on the average purchase price in Wales of £160,000.

Around 13,000 homes in the £125,000 to £250,000 bracket were sold in Wales last year.

The Welsh Conservatives said they were setting out the principle of the policy and there would be more details in their manifesto for the 2016 assembly election.

This is the first defined policy on stamp duty for Wales outlined by any of the parties.

It is understood Mr Davies believes that by "sounding the horn of low tax" Wales can begin to reverse a "brain drain" from Wales to London, and send a message to the "strivers and the ambitious" that they can be better off in Wales.

He told BBC Radio Wales: "If you ask most people what their dream is, it is to own their own property.

'Secure the deal'

"And one of the things that proves to be the biggest obstacle is the final couple of pounds people need to put in place to secure that property.

"And stamp duty is one of the equations you have to jump through to secure the deal."

Mr Davies said his proposals would ensure £1,600 "goes back to the purchaser".

He added: "That would enable the deal to be sealed and ultimately allow people to have the dream of home ownership here in Wales."

Stamp duty is zero for property selling for up to £125,000.

Between £125,000 and £250,000 it is 1% and between £250,000 and £500,000 it is 3%.

For properties costing £500,000 to £1m it is 4%.

The Conservatives said they would levy stamp duty at 3% for properties above £250,000.

A spokesman for Welsh Finance Minister Jane Hutt said the Conservative policy would cost £25m a year "based on the recent subdued market" but was likely to cost "considerably more" in the future as the housing market picked up.

"As a responsible government we have already started to consult with the housing industry to get their views on the best way to take stamp duty forward in Wales," he added.

"When we have fully costed and developed plans for stamp duty we will put forward our proposals."

Control of stamp duty is being devolved by UK ministers, together with other new taxation and borrowing powers under the draft Wales Bill in response to recommendations from the Silk Commission in 2012.