The claim
The stamp duty land tax temporary relief for first time buyers will cost £230m in 2010-11.
Source: 2010 Budget report, Table A1, line 13

The background
The two-year stamp duty holiday for first-time buyers of properties valued up to £250,000 was one of the few sweeties announced by the chancellor yesterday. But how generous is it?

The analysis
According to yesterday’s budget, the stamp duty holiday will cost £230m.

But just two weeks ago, a written answer to Liberal Democrat Treasury spokesman Lord Oakeshott put the cost of a stamp duty holiday for first-time buyers in 2010-11 at £100m.

We asked the Treasury to explain the discrepancy. They said it was a question of timing. The government has only promised the stamp duty freeze for two years, so it expects more people to buy houses during that time.

The parliamentary question costing doesn’t take into account the effect of behavioural change – i.e. it’s not adjusted to allow for more people rushing to take advantage of the new tax.

The verdict
So who’s right? We won’t know for sure until the money starts rolling in, but it’s interesting to note that both figures are different from another Treasury costing given to Lord Oakeshott in October.

This put the cost of cutting stamp duty for first-time buyers at £200m in 2010-11, rising to £300m in later years.

But this higher figure was later used by Labour as part of a dossier accusing the Tories – who have promised to abolish it for the long term – of making unfunded spending commitments.