Graham Stuart MP has backed a £9 billion plan to abolish Stamp Duty on family homes, saying it would get people moving and make better use of the homes we already have.
New analysis shows someone buying the average East Riding home could save £1,908 under the plans.
The average property price in the East Riding is £220,408, according to the figures accompanying the analysis.
But Graham says the bigger prize is removing some of the “grit in the gears” which discourages people from moving to a home that better suits their needs.
Stamp Duty Land Tax is charged when people buy property above the relevant threshold in England and Northern Ireland. For someone who already owns their home, moving can mean paying thousands of pounds in tax on top of estate agents’ fees, solicitors, removals and the other costs of moving.
That can encourage people to stay where they are, even when their home is no longer right for them.
Someone whose children have left home may be ready to move somewhere smaller and easier to manage. But if the cost of moving makes them decide to stay put, their larger home does not become available for a family looking for more space.
That family may then stay in its smaller home, which in turn does not become available for someone trying to take their next step up the housing ladder.
Research cited alongside the Conservative plans suggests as many as two million people would consider downsizing during the next five years if Stamp Duty were abolished.
The Conservatives argue that if just half of them did so, as many as one million additional homes could become available to buy.
The proposal would abolish Stamp Duty entirely when people buy their main home, regardless of the purchase price.
It would not apply to additional properties, homes bought by companies or purchases by non-UK residents.
The Conservatives say abolishing the tax would also benefit businesses which depend on people moving. The analysis accompanying the proposals estimates increased housing transactions could generate an additional £1.2 billion for businesses such as builders, decorators and removal firms.
The policy has been costed by the Conservatives at £9 billion in 2029-30.
It forms part of the party’s economic plan, under which it has identified £47 billion of proposed reductions in public spending. These include £23 billion from welfare reform, £8 billion from reducing the Civil Service by 132,000 posts, £7 billion from overseas aid, £3.9 billion from restricting access to social housing, £3.5 billion from ending asylum hotels and £1.6 billion from changes to energy spending.
Under the Conservatives’ Golden Economic Rule, at least half of savings would be used to reduce the deficit. The remainder would be available for tax cuts and measures intended to increase economic growth, including abolishing Stamp Duty on primary residences.
John Fareham, who is looking to move from Hull to Holderness, said:
“There are some really keen prices on lovely properties in Holderness currently and I am more than ready to leave urban Hull.
“However, more than £8,000 Stamp Duty is dead money and kills the deal.”
Graham said:
“Stamp Duty puts grit in the gears of the housing market.
“We want people to live in homes that are right for them. That means making it easier for a growing family to find somewhere bigger and for someone who no longer needs a large family house to move somewhere smaller.
“At the moment we do the opposite. We charge people thousands of pounds simply for moving house, in return for nothing whatsoever.
“John’s experience shows exactly what is wrong. He wants to move. There are homes in Holderness he would like to buy. But an £8,000 tax bill can be enough to stop the move altogether.
“That doesn’t just affect John. Every time somebody decides not to move, a home which could suit somebody else stays off the market.
“Removing Stamp Duty would help people move, free up housing capacity and make better use of the homes we already have.
“For the average East Riding home, the saving would be £1,908. But the real prize is getting the housing market moving so more people can live in homes that are right for them.”
Andrew Griffith MP, Shadow Chancellor of the Exchequer, said:
“Everyone agrees that stamp duty is a bad tax. That is why the Conservatives have set out a clear and fully funded plan to abolish it.
“This analysis shows how our plan will save families an average of £4,600 when buying a home, meaning more money spent on decorators, home improvements and furnishings, creating jobs and opportunities for young people.
“Only the Conservatives have a leader with the backbone and strong team needed to cut taxes in a fiscally responsible way to build a stronger economy.”
Katie Lam MP, Shadow Secretary of State for Housing, Communities and Local Government, said:
“Stamp duty is one of the worst taxes. It’s a tax on aspiration, on working hard and investing to provide security for your family. And it stops people setting down roots in their communities - whether that’s people trying to get on the housing ladder for the first time, or people trying to downsize in their retirement.
“These latest figures reveal, once again, the heavy burden that stamp duty is placing on first-time buyers on Labour’s watch. Combined with their total failure to deliver new homes, these costs are stopping people from realising the dream of homeownership.
“Only the Conservatives will scrap stamp duty on the family home, getting the market moving and giving young people a leg up onto the housing ladder.”
