Kemi Badenoch Pledges to Scrap Stamp Duty

Kemi Badenoch has promised to abolish stamp duty for primary homes in a surprise announcement at the Conservative Party conference.

Speaking to delegates in Manchester on Wednesday, the Tory leader described the property levy as “un-Conservative” and a “bad tax” that held back economic activity.

The move is part of a wider attempt by the Tories to regain their reputation as the party of home ownership and competent management of the economy.

The Institute for Fiscal Studies (IFS), an economic think tank, has previously argued that stamp duty is the UK’s “most economically damaging tax” because it deters property sales.

The tax is paid by property buyers upon purchase. Scrapping it for primary residences would cost the Treasury £9bn a year by the time of the next election, according to Tory estimates – but would provide a significant boost to growth.

“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. So 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. Conference – the next Conservative government will abolish stamp duty on your home. It will be gone.”

The Tory leader added: “Scrapping stamp duty will benefit people of all ages because Conservativism must speak to all generations.

“The young professional, buying their first flat. The couple looking for somewhere to bring up their first baby. The growing family hunting for their forever home. The pensioner who wants somewhere a little smaller, or maybe to move nearer the grandchildren.

“No longer will they be punished with a tax that is a barrier to doing the right thing for them, for their family and for society.”

Mrs Badenoch has put creating a “strong economy” at the heart of her first full conference as leader. The Tories argue that removing stamp duty will lower the barrier to buying property, leading to increased sales and generating more economic activity.

Currently, it must be paid on the value of a home over £125,000. First-time buyers do not pay the levy on the value of a property up to £300,000. The tax rate starts at 2 per cent, rising as high as 12 per cent for houses worth more than £1.5m.

The decision to focus on primary residences is being framed by Mrs Badenoch’s team as a way to drive up home ownership, and is also designed to appeal to young people. Just eight per cent of 18 to 24-year-olds and 15 per cent of those 25 to 49 voted Conservative at last year’s general election.

While stamp duty would be abolished for all primary residences, regardless of price, the Tories are not promising to change the tax on shares or second homes.

Only properties in England and Wales would have stamp duty abolished, because control of the tax is devolved to the Northern Irish and Scottish administrations. Leaders there would need to decide whether to match the pledge.

Tory advisers said no specific estimates had been made of how many more properties would be sold, or the impact of the policy on house prices. But they argued that it would increase housing supply by reducing the barriers to downsizing.

Stamp duty on primary homes currently brings the Treasury £4.5bn, according to the IFS. The Tories say this would rise to £9bn by 2029, when the next general election is due, because of the freezing of thresholds dragging more buyers into paying higher stamp duty rates.

The IFS said last year: “In a crowded field, stamp duty land tax has a claim to be the most economically damaging tax in the UK. It makes both housing and labour markets less efficient, acting as a drag on growth. It should be reduced or – even better – abolished, and certainly not increased.”

The Institute of Economic Affairs, a Right-leaning economic think tank, said after the announcement: “Abolishing stamp duty is the single best reform any government could make to Britain’s tax system.”

It is unclear how soon the Tories could implement the change if they got into government. Some experts warned that the property market could stall in the months leading up to the election if it looked as though the Tories could win, with would-be buyers waiting for the cut.

Mrs Badenoch and her team have used the conference to announce a slew of policies, having spent the first months of her leadership insisting time was needed for thinking.

There have been promises to leave the European Convention on Human Rights, deport 150,000 migrants who are in the UK illegally, and reduce energy bills by £165 per household.

The stamp duty policy would be funded by the plans for £47bn in savings unveiled at the conference, around half of which come from reforms to the welfare system.

The new positions coincide with the Tories languishing at around 16 per cent in the polls, behind Labour, on 21 per cent, and Nigel Farage’s Reform UK, on 30 per cent.

There is continued speculation about whether Mrs Badenoch could face a leadership challenge, but many senior Tories believe a no confidence vote – which can be triggered by a third of Conservative MPs from next month – is unlikely even after next May’s local elections.

Mrs Badenoch made only passing reference to Mr Farage in her speech, taking a swipe at what she claimed was his belief in a “magic money tree”. The Tories have argued that Reform’s economic plans do not add up.

Instead, she used her address, which received half a dozen standing ovations from the audience, to map out a vision of what the Conservative Party under her leadership should embody.

Near the end of the speech, she said: “People want to know what I stand for. I stand for a government that takes less of your money and doesn’t interfere in your life, where the state does less but does it better.

“Where those who create wealth are welcomed with open arms, not driven from our shores. Where reward matches effort. Where Britain stands tall in the world. I stand for an economy where profit is not a dirty word, where enterprise is supported not crushed. I stand for a country where what you put in determines what you get out, where excellence is celebrated.

“I stand for a country where actions have consequences, where we talk about responsibilities as well as rights. Where crime is punished and justice is served. Where the welfare of victims outweighs the welfare of criminals.

“I stand for a society where free speech trumps hurt feelings. Where everyone knows what a woman is. Where people are judged by the content of their character, not the colour of their skin. Where the vulnerable are supported, but where freeloaders are told where to get off.

“Conference, I stand for stronger borders and a stronger economy so that the young can fulfil their potential, the old can live out their years in dignity, and everyone can achieve their dreams – to own a home, run a business, raise a family. This is the Britain I stand for.”

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Kemi Badenoch, Conservative Party Conference, Conservative Party, Stamp duty
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