Call for CGT on main residences

Kate Barker, a former member of the Bank of England monetary policy committee, has called for a capital gains tax to be charged on main residences as a way of cutting property inflation. Ms Barker suggested the reform, although politically controversial, is the best way of tackling the UK’s under-supply of housing. “Charging CGT on gains on our main residences would bring the taxation of housing more into line with other assets, and it would tend to discourage over-investment in housing,” she says.

Source: The Guardian

Some muddy thinking here, surely? How could imposing CGT on these gains possibly “tackle the UK’s under-supply of housing”? Especially as Ms Barker also asserts that it would discourage “over-investment” in housing. How discouraging investment in something can increase the supply of it is beyond us. Its main effect (apart from rendering any government that proposed it unelectable for a generation) would be to cause the housing market to seize up: who is going to move house if there is to be added to the already exorbitant cost of SDLT several tens of thousands of pounds of CGT?



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

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