Conservative Party Pledges to Abolish SDLT – What Would This Mean for the Market?

Considering that the nil-rate threshold above which SDLT must be paid was lowered in April 2025 from £250k to £150k (or from £450k to £300k for first-time buyers), Badenoch’s pledge may be welcomed by many in the residential property market. This article examines the potential effects of the Conservatives’ promised abolition of SDLT on buyers and sellers compared with the current position and with the speculated reforms in the Autumn Budget. 

A Game-Changer for Residential Buyers Across the Board 

Abolishing SDLT on primary residences would remove a large upfront cost that significantly influences buyers’ budgets. Buyers might find that higher value properties which were previously unattainable are now affordable without the extra tax charges.  

Furthermore, unlike the rumoured reforms next month that would only scrap SDLT on higher value homes above £500k, Badenoch’s proposal would benefit buyers at every level, from the lowest to the highest value properties. 

In particular, the abolition would ease the entry of first‑time buyers onto the property ladder by lowering costs – especially in the context of the recently lowered nil-rate threshold.  

Equally, it would support older homeowners who wish to downsize but are deterred from doing so by SDLT charges, effectively trapping them in large homes that no longer suit their needs. It would also avoid the situation risked by the speculated reforms in which downsizers may be liable to pay both a property tax on the sale of their home over £500k, and SDLT on the purchase of a home falling under £500k. This would effectively implement a double taxation, making it even more difficult for pensioners to downsize. 

Badenoch’s proposal to scrap SDLT would also avoid the disadvantage to sellers posed by the rumoured tax reform next month, which would shift tax burdens from buyers to sellers – a move that could depress seller’s net proceeds, disincentivise sales and inflate house prices. 

No Direct Benefit for Landlords, Businesses and Second Homebuyers 

Badenoch clarified at a press release today that the proposed abolition would apply only to primary residences – not additional buy-to-let properties, second homes or properties bought by businesses. This means that landlords who buy additional homes to rent out would not benefit from the reform, except to the extent that the tax savings on their primary residence affords them a larger budget for investment.  

Potential Impacts on Market Behaviour in the Run-Up to Election? 

Due to nationwide speculation around the Autumn budget, some estate agents have already reported that buyers have stalled purchases to benefit from the rumoured abolition of SDLT, and sellers have sought to rush exchanges to avoid new charges.  

This trend suggests that if the Tories were to lead in the polls, the housing market may come to a standstill in the months before the election as buyers delay purchases in anticipation of SDLT being scrapped. This may frustrate sellers looking for a timely sale. 

Conclusion 

The Conservative pledge to scrap SDLT on primary residences is significant because it would remove a large barrier to home ownership for all buyers of primary homes.  

While this presents as being a significant benefit to buyers, in practice the saving may go into the pockets of sellers instead as prices are bid up by the amount of the saving.  

Of course, this assumes Badenoch’s proposed cuts would deliver the projected savings, which remains to be seen.