Rachel Reeves considering charging CGT on sale of main residence?

[Another76543]

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…….. “

They could bring the vape tax forward. She added VAT on education immediately, and yet delayed vape tax until October 2026. Gambling tax definitely needs looking at. Public sector pensions need a review; barely anyone in the private sector enjoys final salary schemes any more. Tax on flights is probably another area worth reviewing; the air passenger duty is often a tiny percentage of a flight.

The trouble is, the Labour back benchers won’t let them touch benefits, unless it’s to increase them.

Get away with not paying more tax..?

I literally just explained with 2 children i pay an effective tax rate of over 80% on a portion of my salary.

Honestly please educate yourself.
Listen to Gary's economics - he is amazing
His podcast "This is how we stop the UK from falling apart" is a good start point.

I qualified for free school meals and my father was a bricklayer...I have an exceptionally well paying job which is now funding an exceptionally average lifestyle.

I am not the enemy... people making 40k pa, people making 20k per year. sick people, people on benefits or people with 8 kids arent the enemy... people with net worths of hundred of millions and billions are.

You've fallen for the bullshit rhetoric pushed to us... the longer you waste your time trying to drag people like me to the bottom the more messed up the economy becomes. ANYONE WITH A NET WORTH UNDER £10M NEEDS TO "UNIONISE". until we unite and start protesting for change this country will only go one way.

Labour sold their party and principles up the river and are in the pockets of lobbyists.

Keir sold his soul for a few average looking suits and a pair of taylor swift tickets... i feel fremdschämen (second hand embarrassment) just thinking about him.

Just don’t sell until labour are kicked out , 4yrs and counting , won’t come soon enough

I agree. I also think we need to look at removing the VAT exemptions, such as on financial services like IFA commissions on pensions/insurance/mortgage "advice" etc. No logic why it's not VATable when other kinds of financial and legal advice is VATable. Also membership subscriptions. Lots of areas that could be brought into the scope of VAT.

I would agree. But look at the performance on state benefits so far. Failure to reform disability and cut WFA. The other things you mention are even more contentious.

Reeves has to survive her party, the right wing press have torn her to bits. Let’s not pretend she has the capital politically either on left or right to make these massive changes. Being unpopular is one thing. Being unpopular and not achieved your unpopular policy is quite another. She does not have political nous.

Speaking of VAT, caviar currently attracts no VAT!

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.

I agree but surely these backbenchers will have to adapt and change or Labour are gone? They probably don’t care and only want to do a term anyhow - but surely they have to reflect and consider allowing RR to cut welfare as the data shows it’s unsustainable. Would also help Labour get back some support from the electorate.

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?!

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.

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

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.

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.

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

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!

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

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.

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.

Flippers tend to be buying second homes and therefore pay CGT

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

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.

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

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.

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!

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.