Scrapping stamp duty could boost housebuilding by 25% and deliver nearly 200,000 new homes over five years, according to new analysis released ahead of a speech by Conservative Shadow Chancellor Sir Mel Stride MP.
The data suggests that abolishing the unpopular tax could spur construction and help address the housing crisis. It shows that new housing starts could increase by a quarter, based on the current progress of the government against its 2024 pledge to build 1.5 million new homes this parliament.
Supporters of scrapping the tax argue that Labour is failing to deliver on its commitment, with housing starts being only half of what is needed to meet the target. The Conservative Party plans to eliminate stamp duty if returned to government, a move welcomed by tax campaigners.
John O'Connell, chief executive of the TaxPayers' Alliance, described stamp duty as "one of the most damaging taxes in Britain". He said it "punishes aspiration, gums up the housing market and traps people in homes that no longer suit their needs". Scrapping it would make it easier for families to move, help older homeowners downsize, and boost economic activity across the country.
Sir Mel is expected to label the tax a "tax on aspiration" and accuse the Labour Government of "failing young people across the board". He will say: "The housing market is not working as it should, shutting people out of the dream of home ownership."
The shadow chancellor will argue that "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". He is also expected to warn that fiscal drag will drag more people into paying stamp duty in the coming years if the tax remains.
Sir Mel will state: "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."
The Treasury has been approached for comment.
