Would abolishing stamp duty really make buying a home cheaper?

Removing stamp duty would, of course, reduce the upfront cost of buying a property. For buyers, that could make transactions more affordable and remove one of the biggest financial hurdles associated with moving. Many commentators have long argued that stamp duty discourages people from moving when their circumstances change. Older homeowners may remain in larger properties because of the cost of moving, while growing families may delay purchasing a larger home because of the additional tax payable. Reducing that barrier could make the housing market more fluid.

However, abolishing stamp duty is unlikely to mean paying less tax overall. Instead, it’s more likely to be used as a way of increasing tax revenue. The key question is therefore what would replace it. The proposals currently being discussed forms part of a wider review of property taxation. While various models have been suggested, including an annual levy based on property or land values, no details have been published.

At the time of writing, reports and commentary have also suggested that a future government led by Andy Burnham may explore additional taxation measures for higher-value residential properties. These could include a possible mansion tax, or a reduction in any qualifying threshold, with figures of around £1.5 million mentioned in media speculation. However, no formal policy has been published, so any discussion of a future mansion tax remains speculative. Homeowners should therefore be cautious about drawing conclusions until detailed proposals, if any, are announced.

That means there are still many unanswered questions: Would any replacement tax apply to all residential properties or only higher-value homes? Would there be exemptions for certain homeowners? How would jointly owned property be treated? Would second homes or investment properties be taxed differently? Would existing council tax continue alongside any new system?

Until those questions are answered, it is impossible to know whether individual homeowners would ultimately be better or worse off. From a legal perspective, it is also important to recognise that buying a property involves much more than simply paying the purchase price.

Anyone considering moving home should avoid allowing speculation about future tax reforms to drive their decision-making. Property purchases should be based primarily on personal circumstances, affordability and long-term plans, rather than trying to anticipate political change. Tax policy can evolve significantly before legislation is introduced and, in some cases, proposals never become law at all.

For existing homeowners, any wider reform of property taxation could also have implications beyond the point of purchase. An annual property-based levy may affect the long-term cost of home ownership rather than concentrating the tax at the point of purchase. Some homeowners may welcome paying less upfront if it makes moving easier. Others may conclude that a recurring annual charge would ultimately cost them more over time. Much would depend on the final structure of any replacement system and how it links to Council Tax.

Whatever reforms may eventually emerge, the underlying legal advice remains the same. Anyone buying or selling property should ensure they fully understand both the immediate costs and the longer-term financial implications of ownership. Tax is only one part of the overall picture. Whether stamp duty remains, is replaced or is abolished altogether, careful legal advice before entering into what is often the largest financial transaction of a person's life remains just as important.

For buyers and homeowners alike, the debate should therefore not focus solely on whether stamp duty disappears. The more important question is what replaces it, and how that new system might affect the cost of owning property for years to come.

"Removing stamp duty may reduce the cost of buying a home, but it doesn't necessarily reduce the cost of owning one. The real question isn't whether one tax disappears—it's what replaces it and how that affects homeowners over the long term."

Jo Martin, Partner Solicitor & Head of Property at Parfitt Cresswell Solicitors