CGT on Homes – Tax when you Gain is more Efficient than Rax on Moving

Lots of reports in press over the weekend that the conservatives are considering reinstating CGT on house price appreciation in their manifesto.  May refused to deny in on Marr.

If you look at what has happened in terms of tax, the top one per cent of people are paying a higher share of tax under us than they did in any year under a Labour government … I think it is right that we should ensure the tax system is balanced and, as I have been clear, it would be my intention to reduce taxes on working families”

The Treasury has long been looking at taxes gained from the housing stock.  Stamp Duty – though a good earner when there is turnover in the housing market is a not particularly efficient tax, it penalises those moving for reasons of employment.

So it would not surprise me if a CGT tax was considered as more efficient.  But it is not way more efficient.  It may disincentivise sellers.  Again everything short of LVY is distinctly second best.

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