Kemi Badenoch used the Conservatives' annual gathering in Birmingham to pitch a back-to-homeownership platform. Her headline move: take family homes out of inheritance tax entirely, and raise the amount couples can pass on tax free in other assets to £1 million ($1.3 billion). She tied it to an earlier promise to abolish stamp duty on home purchases, framing the package as a clean line from buying a home to passing one on.
"The Conservatives are and always have been the party of home ownership," she told members. "This is my guarantee: No stamp duty when you buy your home, no mansion tax when you live in your home, and no inheritance tax on your home when you pass it to your children or grandchildren." She also unveiled a £10 billion air defense effort branded the Britannia Shield.
Badenoch said she was not ready to promise full abolition of inheritance tax, while pitching this as a "first step" toward scrapping it. Her bottom line to delegates: "Conservatives will not announce a tax cut without telling you how we are going to pay for it."
Right now, each partner in a couple can pass on £325,000 tax free, plus an extra £175,000 tied to their main home. The Conservatives want to lift the general allowance to £500,000 per person and remove inheritance tax on primary residences regardless of value. They put the cost at £6 billion, citing Oxford Economics analysis for the think tank Onward.
The party says that by 2029-30 the changes would mean roughly six in ten estates would no longer pay inheritance tax, partly reversing the rise in estates expected to be caught by the levy over the coming years. To cover the revenue loss, the plan sits within £70 billion of savings, with roughly half from cuts to welfare.
Economists have flagged that exempting homes could push people to concentrate more wealth in property rather than assets that would still be taxed. That shift could raise the long term bill and make the housing market stickier if it discourages downsizing. In 2023, the Institute for Fiscal Studies argued that, if such a levy exists, "it should apply in the same way across all forms of wealth inherited." When a home-specific allowance was introduced in 2015, policymakers added measures to prevent discouraging older owners from moving to smaller homes.
According to a Conservative spokesperson, any behavioral shift would probably be modest in reality and they contended that scrapping stamp duty would help increase housing supply.
Polling helps explain the politics here. A YouGov survey of 2,083 adults on Sept. 16-17 for law firm Kingsley Napley found support for abolishing inheritance tax was above the 49% recorded two years ago, with the headline finding that more than half of British adults want it gone. Separately, HM Revenue and Customs data for 2023-24 show the burden lands hardest in the South of England as London's price surge has swelled liabilities.
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This week's rollout is part of an attempted reset after the party's most sweeping defeat in its long history in 2024. Over a four day conference, the Conservatives leaned into tax cuts even as Badenoch moved right on immigration and the environment. Executives and investors at the Birmingham event welcomed the tax cutting focus but said they still want to see concrete plans to ease business pressures and a credible path back to government.
Badenoch, 46, likened the desired turnaround to Marks & Spencer's revival, saying the retailer modernized and "people are flooding back." She aimed sharp criticism at Prime Minister Andy Burnham and Nigel Farage's Reform UK, saying the premier's approach amounts to "hoping that the problems will just go away while Putin attacks our allies, while our economy flatlines," adding: "Hope is not a strategy."
The speech ran for more than an hour.
On Reform UK, she cited donation controversies and remarks about race as reasons there would be no alliance. "A year ago, those politicians were measuring up the curtains for No. 10," she said. "Now, some of them are measuring up the curtains for their prison cells," she added, pointing to ongoing investigations into their finances, among them a £5 million gift to Farage. Responding to comments from Reform MP Suella Braverman, Badenoch said: "To those who say 'unite the right', we are not uniting with that," and added, "I don't want to explain to my son when we're watching our brilliant England team play football that some people don't think our Black players are English."
Voters still see a mixed picture. Polls show the Conservatives are viewed as the most trusted on the economy, yet many also blame them for today's backdrop and associate them more with higher taxes. The party continues to trail Labour and Reform UK in voting intention, and it is still shaking off damage from the mini budget that ended Liz Truss's premiership after seven weeks.
If you expect to pass on a home or inherit one, this plan would matter. The Tories want to lift the general allowance to £500,000 per person while taking main residences out of inheritance tax entirely, with an estimated £6 billion cost and a majority of estates not paying the tax by 2029-30. They say it would be funded within £70 billion of savings, including large welfare cuts, while critics worry about knock on effects if more wealth is steered into property.
Bottom line: if housing is a big slice of your net worth or what you stand to inherit, watch whether these proposals gain traction, and keep an eye on how any stamp duty changes and broader tax shifts might reshape the market where you live.
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