Don’t stop at housing, abolish stamp duty on shares too
Abolishing stamp duty on housing would be a bold step towards economic renewal. But don’t stop there, says Blake Stephenson
The Conservative Party’s announcement to abolish stamp duty on primary residences marks a pivotal moment in the debate over housing, aspiration and economic dynamism. For too long, stamp duty has acted as a brake on mobility, a barrier to ownership and a distortion in one of our most vital markets. Scrapping it is a signal that we are serious about unlocking opportunity and restoring fairness to Britain’s economic foundations.
Stamp duty land tax (SDLT) on homes is one of the most distortionary levies in our system. It penalises movement, traps families in unsuitable housing and suppresses transactions that would otherwise stimulate growth. And I have long thought it should be abolished. According to the Homeowners Alliance, over 800,000 households have shelved plans to move in recent years, citing stamp duty as a key factor. That’s not just lost economic activity – it’s lost potential, lost productivity and lost aspiration.
The Conservative proposal, unveiled by party leader Kemi Badenoch, would abolish stamp duty entirely on primary residences. It’s a policy rooted in principle: that home ownership is a cornerstone of a fair society, and that government should not penalise people for seeking stability, space or a stake in their community. The estimated cost is significant. But so too is the upside.
When someone buys a home, it triggers a chain reaction: removals, renovations, furniture purchases and local spending. It frees up stock, unlocks supply and supports the trades. It also boosts labour mobility, allowing people to move for work without facing punitive costs. In short, it’s a catalyst for growth.
Stamp duty on shares is another drag on our economy
But for me, the case for reform doesn’t stop at housing. Stamp duty on share transactions – currently levied at 0.5 per cent – is another drag on dynamism. It penalises investment, distorts capital flows and undermines the competitiveness of UK public markets. While the idea of a stamp duty exemption for IPOs has been floated, and welcomed, this is a temporary and narrow fix.
The UK is one of the few major economies that still taxes share purchases. The result? Investors are nudged toward private markets, overseas exchanges or complex derivatives that avoid the charge. This weakens price discovery, reduces liquidity and makes it harder for British firms to raise capital. Abolishing stamp duty on all share transactions would cost around £3.5bn annually – but the long-term gains in investment, innovation and market depth could far outweigh that figure.
Indeed, the parallels between our housing market and our public markets are striking. Both are suffering from low turnover, high friction and a loss of confidence. Both are essential to economic resilience. And both are being held back by a tax that discourages participation.
Critics will rightly ask: can we afford this? The answer must be rooted in fiscal discipline. The Conservatives have pledged to offset the housing stamp duty cut through £47bn in spending reductions by 2029, with half earmarked for deficit reduction and half for growth-enhancing reforms. That’s a credible framework. But we must also ask: can we afford not to act?
Britain faces a generational challenge. Home ownership among under-40s has collapsed. Our public markets are shrinking. Investment is stalling. If we want to restore opportunity, we must be willing to rethink the status quo. That means moving beyond temporary holidays or narrow exemptions. It means bold, permanent reform.
Stamp duty is not just a revenue tool – it’s a signal. It tells people whether government wants them to own, invest and build. By also abolishing it on shares, we could also send a clear message: Britain backs our retail investors.
We should recognise that some taxes do more harm than good – and that removing them can be the most responsible choice of all. And in the end, this is about more than economics. It’s about restoring the promise that if you work hard, save and invest in your future, the system will support you – not penalise you.
Blake Stephenson is Member of Parliament for Mid Bedfordshire