Conservatives would abolish stamp duty, says Badenoch
Sara White, Editor, Business & Accountancy Daily
With four years to go until a general election, Conservative leader says Conservatives would abolish stamp duty for main home purchases
Speaking at the party conference, Kemi Badenoch told delegates the Conservatives will remove stamp duty land tax (SDLT) from primary residential purchases.
Badenoch said: ‘At the heart of a Conservative Britain is a country where people who wish to own their own home, can. Our housing market is not working as it should. Because there’s a big barrier that keeps getting in the way. That barrier is the tax you have to pay when you buy your home.’
Badenoch added: ‘I have looked at the stamp duty thresholds to see if we can change them. I have looked at the rates you have to pay to see if we can lower them. I have decided we can’t. Because that simply wouldn’t be enough.
‘The next Conservative government will abolish stamp duty on your home. It will be gone.’
The announcement was met with cheers from delegates, but abolishing stamp duty for main home purchases would be costly, although the Conservatives said it would be fully funded as it has earmarked a total £47bn in savings, including a new golden economic rule, cuts to the benefits bill and the size of government.
SDLT raised £13.88bn in the 2024-25 tax year, with a third of the revenue coming from properties valued at over £1m. The Institute for Fiscal Studies estimates that abolition of stamp duty would cost around £4.5bn a year, and has long called for reform of the tax, which it describes as ‘among our worst and most damaging taxes’.
With a Budget next month and the triple lock commitment to not raise income tax national insurance of VAT, chancellor Rachel Reeves needs to find alternatives to raising tax.
Reeves has asked officials at the Treasury to prepare options for a major overhaul of stamp duty, including a possible national property tax to run alongside SDLT. This property tax would not replace SDLT on owner-occupied homes, but would be a brand new tax on the sale of homes worth over £500,000.
Badenoch’s surprise announcement of a plan to abolish stamp duty on main home purchases will mean property tax will be one to watch at the Budget on 26 November if the chancellor announces her overhaul of the system as trailed last month.
Dan Coatsworth, head of markets at AJ Bell, said: ‘People in the UK are obsessed with the property market. Successive governments have dangled various housing-related carrots to win voters, and the Conservative party is looking for quick wins in its campaigning.
‘Anything to cut the cost of buying a property could strike a chord with swathes of the public. That might secure more votes for the Conservatives in their quest to get back into power, but it would also remove an important tax income stream at a time when public finances are looking fragile.’
While the stamp duty message caught the front pages, four years is a long time in politics.
Sarah Coles, head of personal finance, Hargreaves Lansdown said: ‘There have been a huge number of changes to stamp duty over the years, so it can never be ruled out, but there are serious question marks over what it might achieve, and whether it’s likely to happen.
‘It’s also vital to consider the potential impact on the Treasury, where else this money might come from and what other taxes might rise. It’s an interesting addition to the debate, but it’s only a suggestion from an opposition party, and with just under four years to an election, it’s highly likely that things will change between now and then.’
