In her first major fiscal move, Chancellor Rachel Reeves has pulled the plug on the previous administration's planned stamp duty overhaul, cancelling a contentious tax break for overseas property buyers. The decision signals a stark departure from Tory housing policy and sets the tone for Labour's approach to the UK's deepening housing crisis.
A Swift Reversal of Tory Policy
The abolished measure, initially announced by former Prime Minister Rishi Sunak in the 2022 Spring Statement, would have eliminated the 2% stamp duty surcharge applied to non-UK residents purchasing property in England and Northern Ireland. This surcharge was first introduced in April 2021 to cool demand from international investors and make homes more accessible for domestic buyers.
Ms. Reeves declared the planned relief 'the wrong priority' amidst a critical shortage of affordable housing for British residents. Her announcement, delivered with conviction, framed the decision as a matter of principle: putting the needs of UK citizens first in the property market.
Industry Reaction and Market Impact
The Chancellor's move has drawn a mixed response from property experts. Some industry voices had criticised the surcharge for adding complexity and deterring vital foreign investment in new developments. They argued that this investment ultimately boosts housing supply for everyone.
However, housing charities and affordability campaigners have welcomed the U-turn. They consistently argued that offering tax breaks to international buyers would further inflate prices and push homeownership further out of reach for young people and families across the country.
What This Means for Buyers and the Market
The immediate effect is that the status quo remains firmly in place:
- Non-UK residents must continue to pay the standard stamp duty rates, PLUS the 2% surcharge on residential purchases.
- UK residents purchasing a main home under £250,000 still pay no stamp duty, thanks to current thresholds.
- The decision underscores the new government's focus on prioritising domestic housing needs over attracting foreign capital into the residential market.
This bold reversal is more than a simple policy change; it's a clear statement of intent from the new Chancellor. It firmly closes the door on one chapter of housing strategy and boldly, if contentiously, opens another, setting the stage for a defining political and economic battle over the future of UK property.
