Conservative Proposal: Abolishing Stamp Duty

The Conservative Party has announced plans to abolish stamp duty on primary residences if they win the next general election. This proposal was unveiled by Conservative leader Kemi Badenoch during her keynote speech at the party conference in Manchester on 8 October 2025.

What Is Stamp Duty?

Stamp duty is a tax levied on property purchases in England, Wales, and Northern Ireland. The amount paid depends on the property's purchase price, with higher rates applied to more expensive homes. For example, as of 2025, buyers pay:

• 0% on the portion up to £125,000
• 2% on the portion from £125,001 to £250,000
• 5% on the portion from £250,001 to £925,000
• 10% on the portion from £925,001 to £1.5 million
• 12% on the portion above £1.5 million

This tax is typically paid by the buyer at the time of purchase.

Conservative Proposal: Abolishing Stamp Duty

Kemi Badenoch described stamp duty as a "bad tax" and an "unconservative tax," stating that it hinders social mobility and homeownership. She argued that lowering the thresholds for stamp duty would not be sufficient and that complete abolition is necessary to "free up the housing market."

The Conservative Party estimates that abolishing stamp duty on primary residences would cost around £9 billion, accounting for a projected tax increase in the upcoming November budget. However, the Institute for Fiscal Studies estimates the cost at approximately £4.5 billion.

To fund this policy, the Conservatives propose £47 billion in spending cuts, including reductions in the overseas aid budget (£7 billion), civil service spending (£8 billion), and welfare (£23 billion).

Who Would Benefit?

The policy would apply to all primary residence purchases, regardless of price. However, it would not extend to:

• Additional properties
• Properties purchased by companies
• Non-UK residents
• Purchases in Scotland or Wales, where separate taxation systems are in place

This means that individuals buying their first home or moving to a new primary residence would no longer pay stamp duty, potentially saving thousands of pounds.

Potential Implications

For Homebuyers:

• Cost Savings: Eliminating stamp duty could reduce the upfront cost of purchasing a home, making homeownership more accessible.
• Increased Mobility: Without the financial barrier of stamp duty, homeowners might be more willing to move, potentially leading to a more dynamic housing market.

For the Housing Market:

• Increased Demand: Abolishing stamp duty could stimulate demand, particularly among first-time buyers and those looking to move up the property ladder.
• Potential Price Inflation: Higher demand without a corresponding increase in supply could lead to rising property prices, potentially offsetting some of the benefits of the policy.

For Government Finances:

• Revenue Loss: The government would need to find alternative revenue sources to compensate for the estimated £9 billion loss in stamp duty income.
• Spending Cuts: The proposed spending cuts could have broader economic implications, potentially affecting public services and welfare programs.

Conclusion

The Conservative Party's proposal to abolish stamp duty on primary residences aims to make homeownership more accessible and stimulate the housing market. While the policy could offer significant savings to homebuyers, it also presents challenges in terms of government revenue and potential housing market dynamics. The full impact of this policy would depend on its implementation and the broader economic context.