Kemi Badenoch has pledged to remove inheritance tax from family homes and scrap stamp duty on primary residences under a future Conservative government.
The Conservative leader used her closing conference speech in Birmingham to promise that “nobody will ever pay inheritance tax on their family home”, while couples would also be able to leave an additional £1m tax-free to their families.
Property Soup reports Badenoch also reiterated the party’s commitment to abolish stamp duty when purchasing a primary home and pledged to scrap the incoming mansion tax.
The proposals would represent substantial changes to the taxation of residential property if the Conservatives returned to government.
PROPERTY TAX
Under current rules, residential purchases in England and Northern Ireland attract stamp duty from £125,000, while qualifying first-time buyers pay no tax on the first £300,000 of properties costing no more than £500,000.
Propertymark says removing stamp duty could help improve mobility but warned that any replacement must not simply shift the tax burden elsewhere.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, says: “Propertymark has long called for reform of property taxation, so the Conservatives’ ongoing commitment to scrap Stamp Duty on primary homes is significant.
“Stamp Duty remains a major cost for those looking to move and can prevent people from making the move that is right for them.”
INHERITANCE TAX
Current inheritance tax rules provide a £325,000 nil-rate band alongside a £175,000 residence nil-rate band where a qualifying home is passed to direct descendants.
Unused allowances can be transferred between spouses or civil partners, meaning a qualifying couple can currently pass on up to £1m without inheritance tax. The residence allowance begins to taper for estates worth more than £2m.
Badenoch says her longer-term ambition is to abolish inheritance tax altogether when the public finances allow.
Douglas adds: “The commitment to remove inheritance tax from the family home will also be welcomed by homeowners and families planning for the future.
“For many, the family home is their most significant asset, so providing greater certainty around passing it on will be important. The detail will matter, and any changes must be clear, workable and considered alongside the wider taxation and housing policy landscape.”
