Abolishing Stamp Duty – a good sound bite but a bad policy

Kemi Badenochs announcement that an incoming Conservative government would abolish stamp duty Stamp Duty Land Tax, SDLT), for all main residences may have delighted the low tax free-market supporters around and made homeowners and buyers feel more optimistic yet the policy is fraught with dangers.

 

Opponents of SDLT suggest its abolition would help labour mobility and encourage people who want to downsize to sell up.  They also indicate that reform of property taxes is necessary with the old outdated ideas such as changing council tax rates re-emerging. 

 

“The economic logic is straightforward: stamp duty gums up the market. It penalises mobility, locks people into homes that no longer suit them and deters downsizers who might otherwise free up larger properties. Removing it, advocates argue, could unstick a sluggish housing market and make life easier for both first-time buyers and families looking to trade up.”

[UK property accountants].

 

https://www.ukpropertyaccountants.co.uk/stamp-duty-abolition-would-hit-older-wealthier-homeowners-hardest/

 

Analysis

Stamp duty holidays introduced in the past have resulted in house prices increasing as buyers can afford to pay more for a property.  Sellers benefit but buyers do not.  Those supporting the abolition of SDLT are looking for a simplistic answer to what is a more complex problem.  They ignore the factors such as inequalities in income, wage stagnation, changes to borrowing rules which affect the ability of people to purchase property.  Also missing from their narrative is the impact of second homes, holiday lets and foreign investors buying dwellings, all of which restrict access to the housing market. 

According to Dan Neidle

"Who benefits from the abolition of stamp duty land tax? The first answer: people buying very expensive homes. Average saving for someone buying a £10m+ home is £1.7m. Average saving for someone buying a £250k-£500k home is £5k." [Dan Neidle, Twitter].

 

Conclusion

The debate about SDLT is a total distraction from the real issues affecting first time buyers reflecting the inability or reluctance of lobby groups and commentators to address the actual problem.  Until they and politicians do, first time buyers will find it difficult to access housing and the same applies to renters.

 

 

UK property accountants, 27th August 2025.  https://www.ukpropertyaccountants.co.uk/stamp-duty-abolition-would-hit-older-wealthier-homeowners-hardest/