Big rises in property taxes expected to pay for virus spending
Hefty increases in taxes on the purchase and sale of holiday homes and buy to let properties are expected in the November Budget, leading newspapers claim.
The Times over the weekend, in a well-informed piece written by its political editor, said Chancellor Rishi Sunak was working on plans that would see additional homes sellers paying Capital Gains Tax at 40 or 45 per cent.
This would be in line with each seller’s own income tax liability, instead of the current 28 per cent CGT imposed in the sale of some residential property.
“Officials are now working on plans to equalise Capital Gains and income tax” a Whitehall official is quoted as saying.
Meanwhile the Daily Telegraph, which also has unnamed Whitehall sources quoted in its story, suggests Sunak is looking at simplifying inheritance tax in relation to estates.
It’s been known for some months that Sunak has been calling for revisions to CGT, while there is no indication that the government will extend the current stamp duty holiday due to expire in seven months time.
In addition, the government has been lobbied by the Social Market Foundation, a think tank, which says tax on the increases in the value of homes would ensure the costs of the Coronavirus crisis do not fall unfairly on younger people.
The foundation - set up by Conservative peer Lord Danny Finkelstein - wants the Treasury to raise £421 billion over the next 25 years by imposing a new Property Capital Gains Tax on all homes sold in the UK.
In return, stamp duty could be scrapped it suggests.
The new Property CGT could be set at 10 per cent of the increase in the value of the property since it was last sold, the foundation suggests.
