Rightmove has released a regional analysis showing how Labour’s proposed Capital Gains Tax (CGT) on primary residences could affect homeowners across the UK.
According to a leak reported by The Times, the CGT would potentially apply to homes valued over £1.5m – a move that could disproportionately affect certain regions where house prices are significantly higher than the national average.
This proposal follows speculation that the government is also considering a major overhaul of property taxation – including replacing stamp duty on homes worth over £500,000 with a new annual property tax, possibly to be announced in the autumn Budget.
If introduced, these changes would mark a significant shift in how property is taxed in the UK, with the potential to impact both property values and buyer behaviour, especially in high-value regions such as London and the South East.
Colleen Babcock, Rightmove’s property spokesperson, said: “In essence this would predominantly be a tax on the most expensive areas of London and the South East. The London market is already feeling the effects of taxation more acutely than other parts of England, and this is likely to deter some moves at the upper end.
“While our data shows that only a small proportion of homes for sale are in this price bracket, alongside the proposed stamp duty changes, it could be a double whammy for the capital.”
Proportion of homes for sale over £1.5 million by regionÂ
Region | Proportion of homes for sale over £1.5 million |
London | 10.9% |
Average outside of London | 1.6% |
South East | 4.4% |
East of England | 2.3% |
South West | 2.2% |
North West | 1.1% |
West Midlands | 1.0% |
Yorkshire and The Humber | 0.7% |
East Midlands | 0.6% |
North East | 0.5% |
Currently, main homes are exempt from capital gains tax in the UK.
You usually do not pay CGT if:
You’ve lived in the property as your only or main residence for the entire time you’ve owned it
You haven’t rented it out (except to a lodger)
You haven’t used it for business purposes
The garden and grounds (including buildings) are less than 5,000 square metres
You haven’t developed or split the property for profit
When CGT may currently apply to a main home:
You might owe CGT on part of the gain if:
You rented out the home for part of the time
You didn’t live there the entire time you owned it
You used part of the property exclusively for business
The property is very large (over 5,000m² including grounds)
You inherited it or received it as a gift and never lived there
In such cases, partial relief may apply, and you’ll pay CGT only on the portion of the gain not covered by Private Residence Relief.
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Read the orginal article: https://propertyindustryeye.com/what-impact-could-new-capital-gains-tax-proposals-have-on-your-local-housing-market/
