PolicyLens

Conservative - Tax

Abolish stamp duty on main homes

Remove residential stamp duty for primary residences, while leaving second-home and investor treatment unspecified.

Last updated: May 2026.

Read the policy-specific methodology note

Tax baseline

The costable scenario abolishes stamp duty on primary residences. HMRC ready reckoners cover marginal rate cuts, but full abolition is non-linear and sensitive to transactions and house prices.

  • Direct receipts loss is large.
  • Transactions and mobility likely rise.
  • House prices may absorb part of the benefit.

Core trade-offs

Buyers and movers gain from lower transaction taxes. The Exchequer loses a large revenue stream, and some gains flow to sellers through higher prices unless housing supply responds.

  • Movers and first-time buyers gain cash-flow relief.
  • Treasury loses recurring SDLT receipts.
  • Sellers may capture some gains.

Fiscal impact by 2028-29

+GBP 6.5bn to +GBP 12.5bn. Central estimate: +GBP 9.0bn.

  • Positive numbers mean net fiscal cost; negative numbers mean Exchequer savings.
  • Main cost is lost SDLT receipts.
  • Higher transactions recover some tax receipts.
  • Full abolition is non-linear and regionally uneven.
  • This is not an official costing.

Economic impact by 2028-29

  • Jobs: Housing transactions support estate agents, conveyancing and refurbishment jobs.
  • Wages: No broad wage effect; mobility may improve job matching for some households.
  • Prices: Likely upward pressure on house prices where supply is tight.
  • GDP / productivity: Mobility gains are positive, but unfunded revenue loss is a large drag.

Assessment

Stamp duty is a damaging tax on mobility, so abolition has a stronger efficiency case than many tax cuts. But the fiscal cost is large and some benefits may capitalise into higher house prices, especially where supply is constrained.

Confidence: Medium-low. The distortion is well evidenced; the full abolition cost is uncertain because transactions and prices respond non-linearly.

Main risks

  • Revenue loss: Abolition removes a major property-tax receipt unless replaced.
  • Price capitalisation: Sellers may capture part of the tax cut through higher prices.
  • Distribution: Higher-value homeowners and frequent movers gain most in cash terms.

Safeguards

  • Pair with property-tax replacement options.
  • Retain anti-avoidance rules for second homes.
  • Monitor price and transaction effects by region.

Academic evidence

Best and Kleven, Review of Economic Studies, 2018

Stamp-duty bunching

UK stamp-duty notches distorted transactions; temporary cuts raised activity but partly brought forward purchases.

Supports mobility gains but warns against treating receipts losses as self-financing.

Housing Market Responses to Transaction Taxes (2018)

Hilber and Lyytikainen, Journal of Urban Economics, 2017

Transfer taxes and mobility

Higher housing transaction taxes reduced household mobility, especially among short-distance movers.

Directly relevant to abolishing stamp duty on main homes.

Transfer Taxes and Household Mobility (2017)

UK government evidence

Office for Budget Responsibility, 2026

OBR fiscal forecast

The OBR forecast sets the macro, borrowing and receipts baseline used for broad fiscal context.

Prevents treating tax cuts or spending changes as self-financing.

Economic and fiscal outlook: March 2026 (2026)

Sources

Other Conservative policies

PolicyLens estimates are illustrative and should not be treated as official costings.