Home sales tax to raise £629bn, Su­nak told

The Daily Telegraph - Business - - Business - By Melissa Law­ford

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.

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