Kemi Badenoch, the Conservative leader, has promised that family homes would be free from inheritance tax should her party take power in the upcoming general election—a policy that could transform how people in the UK manage property transfers.
Speaking at the Conservative Party Conference, Badenoch outlined plans to eliminate inheritance tax on primary residences. She also proposed an additional £1 million allowance for couples, exempt from the levy.
“The next Conservative Government will legislate so nobody will ever pay inheritance tax on their family home,” Badenoch stated. She added that her goal is to abolish inheritance tax entirely when fiscally viable.
According to Badenoch, these changes would lower all inheritance tax bills and reduce the number of families paying the tax by more than half. They form part of a broader property taxation package, which includes removing stamp duty on primary home purchases and ruling out any mansion tax on occupied properties.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, highlighted the importance of the stamp duty commitment. “Stamp Duty remains a major cost for those looking to move and can prevent people from making the move that is right for them,” he said.
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However, Douglas stressed that any replacement taxation system must be “properly considered and developed” with industry consultation to ensure it supports transactions rather than shifting the tax burden elsewhere.
On the inheritance tax proposal, Douglas noted that the commitment “will be welcomed by homeowners and families planning for the future.” He added that for many households, the family home represents their most significant asset, making certainty around succession planning important.
The property market has seen homeowners increasingly focused on financial planning, with taxation remaining a key consideration for those looking to move or pass on assets.
The proposals represent a significant shift in Conservative property taxation policy, though their implementation would depend on the party securing victory in the next general election. The current inheritance tax system applies a 40% rate on estates above £325,000, with additional allowances available when passing on a main residence to direct descendants.