Rachel Reeves considering charging CGT on sale of main residence?

Old people often don’t have the health to actively downsize. It’s one of the most stressful things you can do as a fit person let alone when you are feeling weaker and less resilient. That house will also have a wealth of memories attached to it in some cases. The lines on the wall as the kids grew, the pets buried in the back garden. I don’t think many elderly people are deciding not to move because it doesn’t make financial sense or they are trying to screw over some more young people. They are just getting through the next day and then the next.

I don’t think that’s true. Financially it would make complete sense for us. The thing that stops us is the dearth of suitable property. There are virtually no bungalows where we live and, even if purpose built flats weren’t the latest 21st century rip off, we don’t want to live in a geriatric ghetto.

No. I hope that the market evens out so that the under 40s can have some quality of life at some point.

No she wants to find her ‘forever home’ that she can treat like an actual home - not an investment and wants to stay in it until she’s old and …. oh wait 🤔

Of course they will. Any transaction already in progress would have to be exempt. And it only takes months and months because solicitors move at the speed of a sloth. It never used to take so long.

Thing is though… taxing the people who own these homes won’t actually improve the house situation for everyone else.

To do that we need to build more homes.

TBH I think most pensioners have no interest in downsizing anyway - so these properties will be taxed eventually anyway, at the 40% IHT rate over the exemption vs 24% capital gains on the growth. So the whole thing might be a bit of a red herring.

So I wonder what exactly they think it will raise vs the IHT taxation route.

The market won't crash. The demand is too high. It will flat line at certain tiers of the housing market but it won't crash. In other points of the market demand will be driven higher and this will disadvantage anyone who isn't a cash buyer - mainly families. It will be even harder for them to find affordable properties. This isn't people on a household income of £300,000 and feeling hard done by (for anyone wondering).

The idea that the market will crash is dumb and silly.

Ah - so all becomes clear lifeofashowgirl is hoping for a property crash so that she can join the capitalist bourgeoisie

Of course there won't. This assumption completely ignores the fact that it takes months and months to sell a home - particularly a high value one. Unless the changes are pushed way into the future then people won't have time to do this. In any event, not everyone is ready to move yet - the only ones who would rush would be those who are thinking of moving anyway. If this sort of change comes in it will come in very quickly.

Hopefully it crashes the market back down to normal levels

People will refuse to downsize even more.

I somehow doubt it. If anything there will be a rush to downsize before it takes effect, that would be a good thing it should bring prices down a bit.

Where are you getting your language from? It’s so bizarre that you are angry at other people for wanting to stay living in a house they own and may have lived in their whole lives. It wouldn’t occur to me that a widow who lives in a three or four bedroom house and owns it has any compunction by society to move out of her home to free it up. We aren’t a communist country yet. Who do you think you are to compel others to give up the things that they own?

Yes, let’s tax the lowest paid in society into absolute oblivion because the richest don’t want to pay. How fair!

People will refuse to downsize even more.

Inflation since 1980 is 448%. So if I had £100 in 1980 it would buy me what I have to pay £548 for now. Do you understand this?

The country is broken and we need to raise revenue.

This page shows the impact of various changes

https://www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-january-2025

We should be increasing income tax by 1p. We should be ensuring all goods and services are subject to vat and not excluding traders who earn less than £80k. We should be reserving the NHS for clinical need. We should be implementing the changes to benefits that the government wimped out on implementing.

If you bought long enough ago you certainly have. The house I bought in 1991 has recently sold for more than 500% more than I paid for it. The people hoarding property are people like me who live in houses too big for them as well as foreign investors buying up London property that’s never been lived in. Now I’m hoarding because there’s a shortage of suitable property to downsize into - thank you all the people who have turned bungalows into houses.

People who refuse to downsize, people who will move into care and refuse to sell to pass down, etc etc.

You can argue with the facts but those are the statistics. I posted a link. In the last 50 years, house prices have skyrocketed, wages haven’t, and a huge class of people have been left behind. All the while, the burden on the NHS and the burden of the pension system has grown and we need something.

Primary homes are not being hoarded they are being lived in as primary homes.

The vast, vast majority of people have not seen 677% increases in their home values for goodness sake.

It is a logical argument. Rent and mortgage payments are to keep a roof over your head. Everyone pays one or the other. The difference is that one is buying someone else’s asset and the other is buying your own.

I don’t view anyone as the enemy.

I think it’s just time we wake up to the reality of the situation this country is in. We have houses being hoarded to protect wealth to make use of the IHT reliefs. We have a broken housing market where house prices are rising at an exponential rate and wages are not. We can’t just keep raising income tax because those on the lowest wages would simply be unable to afford to exist. It’s ludicrous that people can gain 677% on their properties and pay no tax on the gain.

Plus national insurance

You pay over half your gross income on tax over £100k really. 62% £100-125k then 45% from £125k.

Not to mention @LifeOfAShowGirlthat many in this bracket, who you clearly view as the enemy, are net wealth creators who also generate the jobs that pay for other families to live.

You have to wonder how it will be calculated exactly, given the long time periods over which many people have owned their owns (and let’s face it - yes made huge capital gains, but also probably spent some money at some point on improvements).

We spent about a third of our houses value when we bought it, on renovations. I think we probably will break even on that investment - we did it to make the house big enough, as we couldn’t afford something (particularly inc stamp duty) of the size we would have liked. I can quite easily provide evidence of that as it was recent - albeit probably not evidence of all spending!

Now it you’d done that 20 years ago… or any ongoing smaller projects - very difficult to prove having not known you may have to in future.

That isn't a logical argument. This isn't about the rights and wrongs of property ownership. We don't live in a communist state.

Anyway my personal circumstances aside, this just demonstrates that this "property wealth" is largely illusionary and due to inflation (which the government is supposed to manage and control). People simply won't downsize, they will stay put and release their equity, the market will stagnate at all levels (due to chains), larger properties wont come onto the market and so those that do will be able to ask even more money, people will be pushed into negative equity sooner if they've remortgaged, the housing market on the channel islands will go through the roof etc etc. It's a ridiculous idea.