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…….. “

But in reality, this will only be a little more than stamp duty was. It’s just sellers not buyers who pay.

From what I understand, this suggestion does not involve getting rid of stamp duty. There’s a possibility that both exist, so a seller would have to pay CGT on sale and stamp duty on an onward purchase.

The suggestion is to remove stamp duty from everything I have seen.

To put it frankly if you have made a gain of nearly £1 million you can afford the tax liability.

Did you read what I wrote. I haven't made a gain. It looks like Ive made a gain if you ignore inflation and because I cant produce 15 year old receipts for the building works.

Iv actually lost money in real terms. Ive spent £1.3m I could sell for £1.8m so I would actually have made £500k but actually all of that is eroded by inflation so Ive made a real term loss.

But you have. If you sell up and leave you’ll have nearly £1m in your bank account.

I think we will always have different views on this.

Of course everything is speculation at the moment (or possibly leaks to the media). The articles I’ve read concern 2 separate ideas though. Firstly, replacing stamp duty with a different tax. The second, separate idea, involves CGT.

No I won't - I would have £500k (less £230k CGT if this came in) so I'd have £270k sitting in the bank. Id have lost money significantly when you factor in inflation.

Again, I think we’ll always have differing views. I think it’s a crying shame the richest and most privileged in society see no need to pay their fair share

How do I not pay my fair share? I'm not "the richest and most privileged in society". I pay a significant amount of income tax etc every year.

It isn't "differing views" its maths..

How much would you have lost if you’d paid rent over the corresponding period?

I think it’s a crying shame the richest and most privileged in society see no need to pay their fair share

It’s this attitude which many people are fed up with. The truly wealthy, for example billionaires, may have ways of structuring their wealth to minimise tax. However, there are many more higher earners and well off who pay more than their “fair share”. For example, anyone with income over £150k is paying almost half of their gross income, over that amount, in income tax. They are then spending more, so are paying more VAT, are likely to pay more council tax, and are less likely to use state resources such as the NHS and education. These are the people who have had enough of being seen as cash cows.

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.

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.

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

Plus national insurance

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.

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.

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.

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.

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 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.

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

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?