Prime Minister Rishi Sunak has pledged to axe stamp duty on homes up to £425,000 for first-time buyers.

Stamp duty land tax currently applies to sales over £250,000. The change would affect 200,000 households every year, the Telegraph reported.

The commitment comes before the Conservatives’ manifesto is revealed next week and builds on a proposal from former prime minister Liz Truss’s Growth Commission.

Rishi Sunak at D-Day 80th anniversary
Prime Minister Rishi Sunak pledged to axe stamp duty for first-time buyers (Andrew Matthews/PA)

From March next year, the threshold figure for stamp duty will fall to £125,000. This is due to the end of a “temporary” relief period, so the levy will apply to cheaper – and likely a greater number of – purchases.

Chancellor Jeremy Hunt had previously said the Conservatives would not increase capital gains tax, stamp duty or the number of council tax bands, or “undertake an expensive council tax revaluation”.

Institute for Fiscal Studies associate director David Phillips had called for the abolition of stamp duty.

He said: “It is one of the most economically damaging taxes levied by the Government, significantly increasing the cost of moving and gumming up both the housing and labour market.”