Proposals to extend capital gains tax (CGT) to main residences are being firmly rejected by UK homeowners, according to new research by Boon Brokers – raising concerns within the property industry about the potential fallout for market activity and transaction volumes.
The findings come amid speculation that Labour could explore changes to CGT as part of wider fiscal reforms, including taxing higher-value primary homes. While no formal policy has been announced, the response from homeowners suggests such a move would be politically and commercially contentious.
In a nationally representative survey of 1,000 UK homeowners, Boon Brokers found:
97% disagreed that taxing main residences is a fair way to raise public funds
78% believe the policy would damage Labour’s electoral prospects
73% view the proposal as unfair
71% said it would make them less likely to sell their home
39% believe the reform would negatively affect all homeowners
32% said they would prefer spending cuts over new taxes
The findings point to a potential freeze in market activity, with many homeowners likely to hold off selling to avoid a CGT liability. This poses a risk of further constraining housing supply at a time when affordability and transaction levels are already under pressure.
Commenting on the findings, Gerard Boon, founder of Boon Brokers, warned: “Introducing Capital Gains Tax on main residences could have serious consequences for the housing market. When fewer homeowners are willing to sell, supply will naturally constrict, driving up competition and prices. This imbalance between supply and demand doesn’t just impact affordability, it would risk stagnating the market and placing greater pressure across all levels of the housing market.”
With chancellor Rachel Reeves expected to deliver her first budget statement next month, the possibility of tax reform — including changes to property-related levies — is drawing close attention from across the industry.
For estate agents, brokers, and developers, the prospect of dampened sales volumes and weakened seller sentiment represents a serious commercial concern.
Read the orginal article: https://propertyindustryeye.com/capital-gains-tax-reform-could-significantly-reduce-property-sales/
