As Britain faces a £40bn gap in the public finances, the question of how to tax property wealth has reignited debate.
Chancellor Rachel Reeves is reportedly considering several measures targeting homeowners with high-value properties, including ending the current exemption from capital gains tax for primary residences.
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.
The threshold is still under review, but setting it at £1.5 million would affect around 120,000 higher-rate taxpayers, leaving them facing capital gains tax bills of £199,973.
It comes after reports Reeves has also asked officials to calculate how a new “proportional” property tax would work in the UK.
The overhaul would see a national property tax replace stamp duty on owner-occupied homes. Council tax could also be replaced with a local property tax, helping to boost ailing local authority finances.
Many Independent readers have already questioned whether such a system would unfairly affect ordinary homeowners, particularly in London and the South East where house prices are inflated, rather than the truly wealthy.
But not everyone agrees. “Taxing property, targeting unearned income, is what the government needs to do,” one wrote.
So, where should the line be drawn? Should property gains be taxed aggressively to redistribute wealth, or would these changes punish ordinary homeowners?
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
Go to website
ADVERTISEMENT
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
Go to website
ADVERTISEMENT
We want to hear from you. Share your thoughts in the comments and vote in the poll below – we’ll feature the most compelling responses in the coming days.
