Conservative leader Kemi Badenoch has pledged to abolish stamp duty should her party win the next general election.
Speaking at the party’s annual conference in Manchester, the Conservative leader branded stamp duty an “unconservative tax”.
“The last Conservative Government cut stamp duty for thousands of home buyers,” Badenoch told delegates. “But now we must go further. We must free up our housing market, because a society where no one can afford to buy or move is a society where social mobility is dead.”
Reacting to the pledge, Tom Clougherty, executive director of the Institute of Economic Affairs, said: “Abolishing stamp duty is the single best reform any government could make to Britain’s tax system.
“As things stand, this outdated and uneconomic levy is wreaking havoc on our already troubled housing market by deterring sales and depressing house-building.
“Indeed, research suggests that the wider social and economic harms are equivalent to three-quarters of the revenue raised – and that’s on top of the loss to the people actually paying the tax.
“This means that stamp duty is many times more damaging, as a source of revenue, than broad-based taxes on income and consumption.
“Any proposal to permanently cut or abolish it is therefore extremely welcome.”
Nathan Emerson, CEO of Propertymark, added: “Across England and Northern Ireland, Stamp Duty has often proven to be a negative pressure for many consumers regarding housing transactions, often placing extra strain and uncertainty within the process.
“Earlier this year we witnessed the direct effect of stamp duty threshold changes, with a rush to complete on transactions on the lead up to April, followed by an immediate lull in the months that followed.
“Propertymark welcomes any proposals that bring higher levels of consumer confidence and affordability, helps streamline the buying and selling process, opens additional opportunities to purchase a property for those who aspire to buy, as well as enabling and supporting people to secure a long-term permanent home that fits their needs more easily.”
Richard Sexton, the commercial director of proptech HouzeCheck, concluded: “Stamp Duty land Tax (SDLT) is an outdated, regressive tax that burdens anyone aiming to buy a home. Existing homeowners and potential first-time buyers should cheer to hear of its proposed removal. SDLT inflates the already hefty costs of purchasing a property.
“It unfairly punishes those who’ve saved to buy a home but now need to upsize or move for work, while also discouraging older homeowners from downsizing – even when their large homes are no longer needed.
“Tenants aren’t spared either – landlords offset the surcharge through higher rents.
“Not only does it cost a great deal of money, it also hampers Britain’s economic efficiency by disincentivising relocation for work. I welcome its proposed abolition.”
Further reaction
Nick Jones, the mortgage sales and marketing director at Access FS:
“Stamp duty is a regressive tax and anyone who is looking to purchase a home or who already owns one and is thinking of moving will be extremely happy with this proposed policy change – along with many economists.
“Stamp duty adds expense to the already costly bill when buying a property. Not only does it penalise people who have saved enough to buy their first home or when they need to upsize, it encourages older homeowners to stay put in larger homes, even when their children have long flown the nest.
“It even hits tenants – how else do landlords recoup the money they spend on the surcharge but through higher rents?
“It kicks in when people are trying to relocate for work, too, so it is also a tax on mobility which, therefore, limits Britain’s economic efficiency.
“I won’t be sorry to see the back of it. The question of what might replace stamp duty is more thorny – but it doesn’t seem crazy to refresh the outdated 1991 valuations currently used as the basis for our council tax calculations.”
Marc von Grundherr, director of Benham and Reeves:
“This is nothing but political hot air designed to win votes and there’s absolutely no chance the Conservatives would give up such a considerable tax haul, especially in these uncertain economic times.
While the property industry may broadly support it and there’s no doubt it would help boost market sentiment, homebuyers will likely end up disappointed if they vote expecting this will ever actually happen.”
Verona Frankish, CEO of Yopa:
“A bold claim that will undoubtedly turn heads amongst homebuyers.
We’ve seen previously how stamp duty relief can help to stimulate the market, with activity climbing sharply during the pandemic reprieve, and again this year before thresholds reverted to previous levels.
So a move to abolish stamp duty would certainly give the market a kick-start, though the real question is whether it will ever come to fruition.”
Damien, founder of Jefferies London:
“Stamp duty is a significant financial barrier for homebuyers across the board, and it has long been one of the key factors restricting mobility within the market. Removing it could drive activity at every level, from first-time buyers to high-net-worth purchasers, while reinvigorating sentiment across the wider economy.
For prime London in particular, the impact could be transformative. International buyers have faced a series of fiscal deterrents in recent years, from higher SDLT rates to changes in capital gains tax, which have collectively dampened investment appetite. Scrapping stamp duty would reverse much of that sentiment, positioning London once again as a highly attractive, liquid, and globally competitive market.”
Shepherd Ncube, founder and CEO of Springbok Properties,:
“Stamp duty is the second largest cost homebuyers must overcome when looking to climb the ladder and so, of course, any move to scrap it would bring a considerable boost.
In essence, it would encourage more buyers to make their move to homes suitable for their respective stages of life, and this could help to alleviate the pressure on the supply of suitable housing stock across the wider market.
Of course, we’re a long way from such a reality at the moment, but even today’s claims will excite many homebuyers given the potential savings that could come as a result later down the line.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“We welcome the Conservatives’ announcement that stamp duty is to be abolished.
“Stamp duty may have proven to be an excellent revenue raiser but is also a deterrent to mobility, upsizing/downsizing and economic growth. Stamp duty reduces liquidity and distorts pricing in the existing homes, as well as new-build, market.
“Genuine first-time buyers shouldn’t pay – they are the engine room of the housing market helping to unlock transactions further up chains.
“But be careful what you wish for. The revenue generated by this hugely unpopular tax will have to be replaced – but there must be a better way.
“We certainly need an urgent debate to determine what alternative is going to have least impact on activity.”
