Home sales tax to raise £629bn, Sunak told
HOMEOWNERS could be hit with a £629bn tax on house sales under plans to ease generational inequality.
Rishi Sunak, the Chancellor, is being urged to introduce a new “property capital gains tax” on the proceeds from selling a house by the influential Social Market Foundation think-tank.
A 10pc charge on sellers’ profits would raise £629bn for the Treasury over 25 years, the SMF calculated.
It said this money could in turn be used to abolish stamp duty and inheritance tax on property, and introduce a first-time buyer incentive to help the young.
But the proposal would break a long tradition of exempting residential sellers from the capital gains regime – and it risks alienating some of the Tories’ most loyal voters.
The SMF – which had a reputation as John Major’s favourite think-tank during his time in Downing Street – said that even after its proposed tax cuts and incentives elsewhere, the scheme would still leave the Exchequer £481bn better off. Industry figures warned the proposals could be the start of a slippery slope.
Jeremy Leaf, a North London estate agent, said: “I think we all know something is coming. It is all very well to set it low, but things go up, chancellors change, there is a risk that it gets much bigger. We would have to trust future governments.”
The SMF’s calculations assume that house prices will track inflation, and that 80pc of homeowners will move in the next 25 years.
Mr Sunak last week ordered a Treasury review of capital gains tax.