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Original poster

Rachel Reeves considering charging CGT on sale of main residence?

337 replies

Another76543 · 20/08/2025 11:34

It’s being reported today that Reeves’ latest idea is to tax homeowners on the capital gain made on the sale of their homes, where that home is above a certain value. From The Independent

“Rachel Reeves is considering hitting the owners of high-value properties with capital gains tax when they sell their homes as part of an attempt to fill a £40bn hole in the public purse.
The chancellor is said to be looking at ending the current exemption from capital gains tax for primary residences as she seeks ways to raise cash in the face of dire warnings about the state of the public finances - a move that would be seen as a "mansion tax".
Such a move would see higher-rate taxpayers pay 24 per cent of any gain in the value of their home, while basic rate taxpayers would be hit with an 18 per cent levy.

Sources told The Times that under proposals being considered for the autumn budget, the private residence relief would end for properties above a certain threshold.
The threshold is said to still be under consideration…….. “

OP posts:
Thread gallery
7
Clingfilm · 20/08/2025 22:23

This thread is an insight into another world. Completely unrelatable to over half of the country.

bluebirdy3987 · 20/08/2025 22:08

bluebirdy3987 · 20/08/2025 21:58

There are lots of people who remortgage when they get into financial difficulty. It’s the obvious thing to do. If you buy a house for £1m and it’s now worth £1.2m you can remortgage to release £200k before resorting to selling. Except now you can’t because you would have a c £50k CGT liability on disposal (I’ve used £1m just for ease of maths here)

There will be people who have already done this. They have decided to use their equity to deal with their financial problems before this proposed change was even contemplated. Those people will be stuck and unable to move. I have a friend who would be in this exact position. She’s consistently spent more than her income and has remortgaged a number of times to release equity.

PeonyPatch · 20/08/2025 21:59

bombastix · 20/08/2025 18:54

Just charge people for remedial work. This is not a real clinical need.

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Agreed

bluebirdy3987 · 20/08/2025 21:58

There are lots of people who remortgage when they get into financial difficulty. It’s the obvious thing to do. If you buy a house for £1m and it’s now worth £1.2m you can remortgage to release £200k before resorting to selling. Except now you can’t because you would have a c £50k CGT liability on disposal (I’ve used £1m just for ease of maths here)

LifeOfAShowGirl · 20/08/2025 21:40

bluebirdy3987 · 20/08/2025 21:27

This would push thousands into a form of negative equity. All those who have secured additional lending on their homes which has eaten into that “gain” would be unable to sell

They’d need to be remortgaging something like 80% of the gain. If you do that, you’re not going to have much equity left, are you?

Original poster
Another76543 · 20/08/2025 21:38

bluebirdy3987 · 20/08/2025 21:27

This would push thousands into a form of negative equity. All those who have secured additional lending on their homes which has eaten into that “gain” would be unable to sell

That’s a good point actually. Anyone who has remortgaged could end up with minimal equity, if any, after CGT has been paid.

OP posts:
bluebirdy3987 · 20/08/2025 21:27

This would push thousands into a form of negative equity. All those who have secured additional lending on their homes which has eaten into that “gain” would be unable to sell

MidnightPatrol · 20/08/2025 21:06

BIossomtoes · 20/08/2025 20:41

a £750k property in London is going to be pretty unremarkable though yes

Presumably she didn’t buy it yesterday and it’s £750k of borrowing, not the value of the house.

Why wouldn’t she have bought it recently?

Even if it was worth £1m that is feasibly a three bed semi somewhere quite ordinary in London.

BIossomtoes · 20/08/2025 20:41

a £750k property in London is going to be pretty unremarkable though yes

Presumably she didn’t buy it yesterday and it’s £750k of borrowing, not the value of the house.

Plantatreetoday · 20/08/2025 20:33

LifeOfAShowGirl · 20/08/2025 20:26

“It’s their home”

So? For some they put their life savings in an index fund. Gains are still taxed. They haven’t done anything to earn the massive increases in value.

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An index fund isn’t a roof over your head
Im sure people have different views, that’s just fine

LifeOfAShowGirl · 20/08/2025 20:26

Plantatreetoday · 20/08/2025 20:13

It’s their home so I don’t agree it should be taxed
Those who extend I believe should pay cgtax on the money made on that extension

Aswell as Second properties which of course currently are

If homes are subject to cgtax in the future then none of them should be exempt. It’s either accepted by the Government that it’s unearned income or it isn’t and how much a property increases in value should be irrelevant.

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“It’s their home”

So? For some they put their life savings in an index fund. Gains are still taxed. They haven’t done anything to earn the massive increases in value.

Plantatreetoday · 20/08/2025 20:13

LifeOfAShowGirl · 20/08/2025 20:03

Both should be taxed.

I fail to see why people who bought homes 40, 50, 60 years ago and have done very little to deserve the up to 677% rise in prices in London (https://www.mpamag.com/uk/mortgage-types/residential/how-much-have-uk-property-prices-increased-over-the-past-50-years/409501#:~:text=Perhaps%20predictably%2C%20London%20sits%20atop,over%20the%20last%2050%20years. ) should get away tax free to be honest.

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It’s their home so I don’t agree it should be taxed
Those who extend I believe should pay cgtax on the money made on that extension

Aswell as Second properties which of course currently are

If homes are subject to cgtax in the future then none of them should be exempt. It’s either accepted by the Government that it’s unearned income or it isn’t and how much a property increases in value should be irrelevant.

rockstarshoes · 20/08/2025 20:02

Another76543 · 20/08/2025 13:31

Equity is the amount you actually own, ie market value less borrowings.

As a simple example, assume that someone has a £1.5m house with £500k borrowings. They originally bought the house for £1m. Their current equity is £1m (£1.5m-£0.5m) which they can put towards another property. If CGT is introduced, they will have to pay CGT on the £0.5m gain, which could be around £120k. That £120k ends up being paid from the proceeds of sale (unless they have spare funds somewhere wise). This means that they’ll only have £880k to put towards another property (the £1m equity less the tax).

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Are you actually RR?

I cannot believe that someone would spend their evening doing the addition & predicted costs of the latest imaginary scheme the press have come up with!

HiddenRiver · 20/08/2025 20:01

Lafufufu · 20/08/2025 19:32

I think it's pretty much known/accepted that given how severely conservatives and labour have shit the bed... despite being a walking catastrophe Reform will win the next election and more economic mayhem will ensue.

My beloved Gary (of Gary's economics fame) shares this view and predicts they'll do one (disastrous) term before falling apart

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Oh agree. I despise Farage and Reform but believe Reform will get in - but others have made me feel better by saying “they are awful and racist but let them in, they will be horrendous, but then everyone will see it and at least it’s over”. So yeah I’ve just resigned to it and think it’s almost better to “get it over and done with” and then another party can make the electorate understand things more - as at the moment everyone seems to have gone down a racist reform rabbit hole and just wants to blame migrants for everything which is just stupid and racist and not except any other measures or that we need to make major changes.

Plantatreetoday · 20/08/2025 19:49

LifeOfAShowGirl · 20/08/2025 19:44

Flippers tend to be buying second homes and therefore pay CGT

The longer you’ve owned it, the more you’ve gained.

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Exactly they are being taxed anyone.
It’s the home owners doing extensions that aren’t

Plantatreetoday · 20/08/2025 19:48

Badbadbunny · 20/08/2025 19:43

I agree. We probably need to bring in some kind of time-based taper as there used to be for capital gains, so that you get more relief (and pay less tax %) the longer you've owned the house. It would catch the "flippers" who buy and sell quickly for profit. Short term gains would then be taxed higher and the people who've lived in their home for decades would get the full relief and pay relatively small amounts of CGT.

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I’d prefer cgtax on m2 extensions
Technically thats developing so should be taxed

Those that buy houses in a state and do them up is a good thing as we need all our housing stock

Those that increase the size are developing and removing large numbers of our smaller housing stock from the market.

LifeOfAShowGirl · 20/08/2025 19:44

Badbadbunny · 20/08/2025 19:43

I agree. We probably need to bring in some kind of time-based taper as there used to be for capital gains, so that you get more relief (and pay less tax %) the longer you've owned the house. It would catch the "flippers" who buy and sell quickly for profit. Short term gains would then be taxed higher and the people who've lived in their home for decades would get the full relief and pay relatively small amounts of CGT.

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Flippers tend to be buying second homes and therefore pay CGT

The longer you’ve owned it, the more you’ve gained.

bombastix · 20/08/2025 19:43

Araminta1003 · 20/08/2025 19:15

They have to grow a pair and ignore some of their own party. They have a significant majority. If they are serious about saving the NHS long term they have no choice and have to make the hard decisions on welfare. Welfare should be for rare cafes only. We shouldn’t be sicker or less able to work than other European countries statistically. It makes no sense. So the criteria needs to become stricter. With less workers to pensioners due to ageing demographic there is no choice. Popularity shouldn’t come into it.

It shouldn’t but it has. I don’t think many Labour MPs have the least clue about public finances.

Combine that with a lot of cakeism on the right and she is absolutely stuck.

Badbadbunny · 20/08/2025 19:43

Plantatreetoday · 20/08/2025 19:29

RR
looking at more wealth taxes
surprise surprise

If a home is going to lose its exemption for PRR then they all should. It’s unearned income however much it is.

Edited

I agree. We probably need to bring in some kind of time-based taper as there used to be for capital gains, so that you get more relief (and pay less tax %) the longer you've owned the house. It would catch the "flippers" who buy and sell quickly for profit. Short term gains would then be taxed higher and the people who've lived in their home for decades would get the full relief and pay relatively small amounts of CGT.

Plantatreetoday · 20/08/2025 19:41

LifeOfAShowGirl · 20/08/2025 19:37

I live in a small seaside town with a lot of people aged 90 and over. it happens a lot where they’ve stayed in the same home their whole lives.

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House prices will increase in 70 years. Along with the price of a loaf of bread.
Nothing new

LifeOfAShowGirl · 20/08/2025 19:40

MumOfManyAliases · 20/08/2025 19:39

How do you know how much they originally bought their home for if they purchased it that long ago then?

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I’ve worked in probate for a while. We have to deal with the first registrations of properties in order for them to sell for the probate process, it’s in the original conveyances. It’s fascinating!

MumOfManyAliases · 20/08/2025 19:39

LifeOfAShowGirl · 20/08/2025 19:37

I live in a small seaside town with a lot of people aged 90 and over. it happens a lot where they’ve stayed in the same home their whole lives.

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How do you know how much they originally bought their home for if they purchased it that long ago then?

LifeOfAShowGirl · 20/08/2025 19:37

MumOfManyAliases · 20/08/2025 19:36

Really? I find that hard to believe. My parents bought their home in 1988 for £80k. It’s probably worth £450k at the very most. Your example sounds ridiculously extreme.

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I live in a small seaside town with a lot of people aged 90 and over. it happens a lot where they’ve stayed in the same home their whole lives.

MumOfManyAliases · 20/08/2025 19:36

LifeOfAShowGirl · 20/08/2025 19:25

I’m not against it.

there are people in my town who bought their houses for £3,000 and they now sell for nearly £1 million. That’s a capital gain of over £900,000. Why should they not pay tax?!

Really? I find that hard to believe. My parents bought their home in 1988 for £80k. It’s probably worth £450k at the very most. Your example sounds ridiculously extreme.

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