Stamp duty land tax

What has Kemi Badenoch promised? 

In her Conservative Party Conference speech on 8 October 2025, Kemi Badenoch pledged a future Conservative government to abolish stamp duty land tax (SDLT) on primary residences in England (and Northern Ireland) bought by UK residents. They would not abolish the tax on second or subsequent homes, or property bought by companies. This tax is devolved so it would be up to the governments of Scotland and Wales whether they decided to follow suit.

The Conservatives estimate the cost in 2029-30 at £9bn although note the current cost is only £4.5bn. These figures are roughly consistent with current forecasts that suggest SDLT raised just over £10bn in 2024-5 ²¹ Office for Budget Responsibility, ‘March 2025 Economic and fiscal outlook – detailed forecast tables: receipts’, Office for Budget Responsibility, 26 March 2025, retrieved October 2025, https://obr.uk/efo/economic-and-fiscal-outlook-march-2025/  and around half of that was charged on additional dwellings ²² HMRC, ‘Quarterly Stamp Duty Land Tax (SDLT) statistics’, HMRC, last updated 30 April 2025, retrieved October 2025, https://www.gov.uk/government/statistics/quarterly-stamp-duty-land-tax-sdlt-statistics . They say they have not taken into account any additional spending (e.g. VAT receipts on refurbishments or sales of furniture that would often be associated with increased housing transactions). They say this would be paid for by the £47bn in spending reductions the shadow chancellor had announced earlier in the conference.  

What is SDLT?

SDLT and the related taxes in Scotland and Wales are taxes on property purchases. They are one-off charges levied at the time of sale. SDLT used to be a relatively low tax, levied on a “slab” basis where crossing a threshold would trigger a higher rate of tax applied to the whole value of a transaction. Following a lead from Scotland, former chancellor George Osborne reformed SDLT in 2014 ²³ HMRC, ‘Stamp Duty Land Tax: reform of structure, rates and threshold’, 3 December 2014, retrieved October 2025, https://www.gov.uk/government/publications/stamp-duty-land-tax-reform-of-structure-rates-and-threshold , moving to a more conventional structure with a nil rate band and then a succession of bands with marginal tax rates. The initial threshold meant that no property worth less than £125,000 would pay tax; the top rate was levied at 12% on the sale price in excess of £1.5m. 

Current rates and bands are set out below ²⁴ Ibid. :

At various times governments have tried to benefit first time buyers, or boost the housing market, by announcing “stamp duty holidays”. The main impact is to concentrate transactions, but this leads to little additional purchasing. Most economists would say that sellers rather than buyers are the principal beneficiaries. HMRC research suggests these are poor value for money.  ²⁹ HMRC, Evaluating the Impact of Stamp Duty Land Tax First Time Buyer’s Relief, HMRC Working Paper 13, The Stationery Office, November 2011.

In April 2016, Osborne introduced an additional 3% levy on additional properties (second homes, buy-to-let properties) ³⁰ HMRC, ‘Stamp Duty Land Tax: higher rates on purchases of additional residential properties’, HMRC, updated September 2022, retrieved October 2025, https://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-on-purchases-of-additional-residential-properties/stamp-duty-land-tax-hig… . Rachel Reeves raised that rate to 5% in her October 2024 budget.  

Is it sensible to abolish SDLT?

SDLT is a convenient way for governments to raise revenue as most people don’t pay it most of the time. But it is generally thought to be a very bad tax. It stops people moving house, trapping them in suboptimal housing, and leading to inefficient allocation of the housing stock – people buy houses that are too big for them or wait to buy, incurring the costs of renting in the interim, to avoid paying stamp duty twice (especially if they live in a high cost area); other people stay too long in an oversized property because they don’t want to pay a big tax on downsizing. Labour mobility is reduced which is bad for the economy. All these are good reasons to get rid of stamp duty on property.

But there is a case for seeing this as part of a more general move to reform property taxes. The UK’s incredibly out of date council tax system taxes cheaper properties relatively too heavily and dramatically under-taxes more expensive properties.  ³¹ ttps://www.gov.uk/government/publications/stamp-duty-land-tax-higher-rates-on-purchases-of-additional-residential-properties/stamp-duty-land-tax-higher-rate…  That is both a result of the structure of council tax, which was deliberately designed to compress valuations and tax paid, and the failure of successive governments in England to have the courage to order a revaluation since the tax was introduced in 1991.  

A number of organisations, including the Institute for Fiscal Studies and the Institute for Government have called on government to undertake a thorough overhaul of the UK’s property taxes. 

Will the government reform property taxes?

The government has not announced any plans to reform property taxes, but there have been rumours that the chancellor might be considering some changes ³² Isaac A and Walker P, ‘Reeves considers replacing stamp duty with new property tax’, The Guardian, 18 August 2025, retrieved October 2025, https://www.theguardian.com/money/2025/aug/18/rachel-reeves-stamp-duty-property-tax-council-tax .