The Conservatives could introduce a series of pre-election giveaways with measures to support first-time buyers and scrap inheritance tax, according to reports.
With the Tories struggling badly in the polls and an election almost certain next year, the Times said the government is to promise to cut the upfront cost of a home for first-time buyers.
The housing secretary, Michael Gove, told the paper the party would “definitely” have a new offer in place before polling day.
One option is reportedly a scheme to provide government support for much longer fixed-term mortgages, such as those on offer in the US, to reduce the funds first-time buyers will need for a deposit.
Gove told the paper: “We have been asking the question, how can we ensure that people with decent incomes who are finding it difficult because of the scale of deposit required can get on to the housing ladder?
“I don’t want to pre-empt anything … but it’s about looking at some of the rigidities in the mortgage market which they haven’t got in other jurisdictions.”
Other options reportedly include resurrecting a version of the Help to Buy scheme, which closed last year. The previous scheme offered a government loan to help people buy a new-build property with just a 5% deposit.
Government sources told the paper the plan would either be announced in the March budget or form part of the Conservative manifesto.
Separately, the Telegraph reports that Downing Street is considering cutting inheritance tax in three months’ time.
It said scrapping inheritance tax is a move that is unlikely to be matched by Labour and that this could create a tax “dividing line” that Tory election strategists crave.
Conservative MPs told the paper they welcomed the reported move and one described inheritance tax as “immoral”.
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The report in the Telegraph, which is campaigning to scrap inheritance tax, acknowledged that only 4% of households pay it and scrapping it entirely would cost £8bn a year.
Tory insiders involved in creating the package of measures for the March budget claimed it is likely to be the final fiscal statement before the next election and will be geared towards winning over voters.
After his autumn statement, Jeremy Hunt said he did not opt for “crowd-pleasing taxes” as a pre-election giveaway, adding the government’s “long-term goal” is to boost the economy.
But the chancellor has been under pressure to announce tax cuts. A freeze on income tax thresholds has pushed millions of people into higher tax bands over the last two years.