The Conservatives have renewed their call to scrap stamp duty on primary residences, arguing that the policy could help stimulate housing market activity and support a significant increase in housebuilding.
Speaking at Propertymark One on Friday, shadow chancellor Sir Mel Stride used his conference address to promote the proposal first unveiled by Conservative leader Kemi Badenoch at last year’s party conference, claiming it would encourage more transactions and boost housing supply.
The MP said abolishing stamp duty would increase housing transactions, pointing to modelling by the Adam Smith Institute indicating the policy could lead to around 200,000 additional homes being built over the course of a five-year parliament. That would equate to a 25% increase on current rates of housebuilding.
The announcement comes as pressure continues to mount on the Labour government over its pledge to deliver 1.5 million new homes during this Parliament. Housing starts remain well below the level required to meet that target, according to the latest figures.
Stride said: “The Labour government are failing young people across the board. The housing market is not working as it should and that is shutting people out of the dream of home ownership.
“Abolishing Stamp Duty would help to get Britain moving again, and it would give developers the boost they need to deliver more of the homes we need as well.”
“Stamp Duty is a terrible tax. It is a tax on aspiration, and it is a tax on productivity,” he continued. “The case against Stamp Duty is undeniable. It is an argument that is both moral and economic.”
“Not only is it grossly unfair, but it is grossly distortionary as well. It is a disaster for our society, and a disaster for our economy as well.”
The shadow chancellor also highlighted the rising burden of Stamp Duty on the housing market, with the tax increasing last year and fiscal drag expected to draw more homes into higher rates of stamp duty as time goes on.
“Last year the reliefs that had been in place were ended and Stamp Duty bills rose, particularly for first time buyers.
And while property prices rise over time, Stamp Duty thresholds do not.
“That means that more and more properties are dragged into higher rates of tax.”
The speech criticised the Labour government’s plans which will mean stamp duty will have roughly doubled by the end of the decade compared to when Labour came to power.
The Office for Budget Responsibility estimate that the total burden of Stamp Duty Land Tax will be £19bn by the end of the decade – compared to around £10bn at the start of this parliament.
Stride added: “That fiscal drag is essentially a massive additional tax rise by the back door.
The Treasury will quietly rake in more and more, while the damaging effects on the housing market grow worse and worse.
“We have to call that out. And I believe we can – and eventually will – win the argument.”
