Rishi Sunak offers tax breaks to landlords in Tory manifesto

Rishi Sunak will unveil tax breaks for landlords today as he puts reducing the tax burden and boosting home ownership at the heart of the Conservative general election manifesto.

The Telegraph can reveal that the Prime Minister will promise to scrap Capital Gains Tax for landlords who sell their property to tenants. The scheme would last two years.

Mr Sunak will also pledge a tax cut for 27 million households if he is re-elected by reducing employee National Insurance again, this time to 6 per cent.

The return of the Help to Buy scheme and a vow to abolish stamp duty for first-time buyers on properties worth less than £425,000 will also be included in the manifesto.

The unveiling of the manifesto, which is about 80 pages long, is one of the last major moments in the campaign calendar for the Tories to trigger a comeback before the general election on July 4.

The policies are an attempt by Mr Sunak to return to traditional Tory strengths of cutting taxes and building homes after years of a rising tax burden and housing shortages.

The Tories have put tax at the centre of the election campaign believing it is an area they can differentiate themselves from Labour.

Mr Sunak used the first TV debate to repeatedly challenge Sir Keir Starmer over what the Tories estimate would be £2,000 in tax rises for each working household over four years under Labour.

Sir Keir, the Labour leader, called the claim a “lie”, saying it was based on incorrect assumptions.

Sunak: We are the party of Thatcher

Mr Sunak will say: “We Conservatives have had to take difficult decisions because of Covid. But we are now cutting taxes for earners, parents and pensioners.

“We are the party of Margaret Thatcher and Nigel Lawson, a party, unlike Labour, that believes in sound money.

“In this party, we believe that it is morally right that those who can work do work, and that hard work is rewarded with people being able to keep more of their own money. We will ensure that we have lower welfare so we can lower taxes.”

However the Tories will not promise to cut or abolish inheritance tax, according to multiple sources, to the disappointment of some Conservatives who have long called for the move.

The Tories have announced new plans almost daily in an attempt to change the opinion polls.

They have included promising to reintroduce national service, guaranteeing the state pension will not be taxed, and allowing more well-off families to keep child benefits.

Despite some individual policies proving popular, there has been no discernible impact on the polls. Labour remains about 20 percentage points ahead of the Conservatives with fewer than four weeks to go before the public vote.

One eye-catching new policy that will be announced on Tuesday will be that for two years landlords selling property to their tenants would not have to pay Capital Gains Tax.

The scheme is designed to convince landlords to free up more housing stock, and also benefit long-term renters by increasing their chances of getting onto the housing ladder.

The approach would not apply to someone’s main primary residence, since that already is exempted from Capital Gains Tax.

Tory figures were unable to give estimates for how many people would take advantage of the change if implemented. It is set to cost £20 million a year, suggesting a limited uptake.

Help to Buy to make a comeback

Other housing policies include the return of Help to Buy, a scheme that allows people to get a mortgage with a deposit of just 5 per cent of the property price.

The Government would effectively provide a loan worth 20 per cent of the property, helping first-time buyers. Developers would also contribute some money, in a tweak to the old scheme.

The Tories are also promising to permanently abolish stamp duty for first-time buyers on properties up to £425,000, as The Telegraph revealed on Friday. This temporary tax relief is due to end in March 2025.

In an interview with the BBC on Monday, Mr Sunak admitted that owning a home “has got harder” under the Conservatives.

The manifesto will also include a promise to change planning rules to boost inner city home-building so places such as London are allowed to become as densely populated as European cities like Paris and Barcelona.

Writing in The Telegraph on his housing proposals, the Prime Minister says: “For too many of our young people, no matter how hard they work, home ownership can seem out of reach.  I remember getting the keys to my first flat – it’s a special memory to me.

“And, like millions before and millions after me, it is a moment which I will always treasure. I want as many people as possible to have this opportunity, to feel that sense of ownership.

“Owning a home makes people more financially secure, gives them a stake in society and, as Thatcher said, is one of the main bulwarks of individual freedom.”

Tory manifesto ‘will be expensive panic attack’

Mr Sunak has decided to pledge billions of pounds on another National Insurance cut, leaning into a long-term ambition to end “double taxation” despite Labour attacks.

The employee rate of National Insurance was reduced from 12 per cent to 10 per cent last autumn and then to 8 per cent in spring. Another cut to 6 per cent will be pledged.

It means the Prime Minister can say he is proposing to halve the employee National Insurance rate and indicate more would come if the Tories have another full term in office.

In the BBC interview with Nick Robinson, Mr Sunak also denied he was copying Liz Truss’s economic approach by refusing to detail where spending cuts to unprotected government departments would fall if he was re-elected.

Labour on Monday continued to refuse to rule out rises to Capital Gains Taxes if they win the election, despite explicitly ruling out other tax increases such as income tax, National Insurance and VAT.

Pat McFadden, Labour’s national campaign coordinator, responded to the manifesto announcements by saying: “The one thing to know about the desperate series of unfunded commitments in the Tory Manifesto is that the money’s not there.

“Their manifesto will be the most expensive panic attack in history.”