Stamp Duty abolition could boost housebuilding by a quarter says Shadow Chancellor Sir Mel Stride.
And the Conservative policy of scrapping Stamp Duty completely for primary residences could drive a significant increase in housebuilding in the next parliament.
In a speech to the Propertymark One annual conference on Friday, Shadow Chancellor Sir Mel Stride set out the case for the radical pledge made by Kemi Badenoch at the Conservative Party Conference last year.
New analysis from the Party suggests that the abolition of Stamp Duty would stimulate activity in the housing market, with evidence suggesting that increased transactions would have a knock-on effect for new housing starts.
The impact is estimated to be an increase in housebuilding of around 200,000 over the course of a five-year parliament, based on modelling from the Adam Smith Institute.
Compared to current rates of housebuilding, it would imply an increase in building rates of 25%.
Atride told agents: “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…
…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 Office for Budget Responsibility estimates 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 told the event: “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.”
