PolicyLens

Methodology note

Abolish stamp duty on main homes: calculation note

Scenario assumptions behind the Abolish stamp duty on main homes estimate. The figures are illustrative and exclude unrelated Conservative pledges.

View main policy page: Abolish stamp duty on main homes

Central fiscal result

+GBP 9.0bn - Net fiscal impact in 2028-29

Low case: +GBP 6.5bn. High case: +GBP 12.5bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

  • Model abolition of main-home residential SDLT by 2028-29.
  • Second homes and corporate buyers are not changed centrally.
  • Baseline uses HMRC SDLT ready reckoners and OBR receipts forecasts.
  • Central cost is GBP 9bn before any replacement tax.

Affected population

  • Affected population is main-home buyers and sellers in the UK SDLT system.
  • Direct gains accrue to transacting households, not sitting homeowners.
  • Indirect exposure includes estate agents, conveyancers, builders and lenders.
  • Regional effects vary with house prices and transaction volumes.

Gross impact

  • HMRC rate ready reckoners are scaled to main-home SDLT receipts.
  • Central cost: GBP 9bn after allowing for higher transactions.
  • Low case assumes strong transaction response recovers some receipts.
  • High case assumes price effects and transactions increase taxable bases elsewhere only modestly.

Fiscal build-up, central case

  • Lost SDLT receipts: +GBP 9.8bn
  • Extra VAT and income-tax receipts: -GBP 0.4bn
  • Higher transaction-related receipts: -GBP 0.3bn
  • Administration and anti-avoidance: -GBP 0.1bn

Central net impact: +GBP 9.0bn in 2028-29.

Behaviour and pass-through

  • Low case assumes more transactions and some offsetting receipts.
  • Central case assumes moderate behavioural recovery of revenue.
  • High case assumes weak offsets and higher house-price capitalisation.
  • Housing supply constraints increase price capture by sellers.
  • No broad GDP dividend is booked as fiscal saving.

Phasing

  • 2026-27: +GBP 1.8bn. Preparation or partial implementation.
  • 2027-28: +GBP 7.2bn. Main ramp-up year.
  • 2028-29: +GBP 9.0bn. Target-year central estimate.
  • 2029-30: +GBP 9.5bn. Continuation at steady-state assumptions.

Main source groups

  • con-plan-2026: Conservative live policy page; used to identify current pledge wording.
  • con-stamp-duty-2025: Conservative conference announcement; used for main-home stamp-duty scenario.
  • hmrc-ready-2025: HMRC tax ready reckoners; main tax-cost anchor.
  • obr-efo-mar-2026: OBR March 2026 forecast; fiscal and macro baseline.
  • best-kleven-2018: Stamp-duty bunching; informs behavioural and incidence assumptions.
  • hilber-lyytikainen-2017: Transfer taxes and mobility; informs behavioural and incidence assumptions.
  • poterba-1989: Housing tax subsidies; informs behavioural and incidence assumptions.