Rich investors back Capital Gains Tax rise for landlords
Think tank the IPPR says making Capital Gains Tax equal with income tax is supported by millionaire investors and would not hurt the property market.
Millionaire investors and business people have given their public backing to higher Capital Gains Tax for landlords within a report from an influential think tank.
The IPPR report reveals these wealthy entrepreneurs believe higher CGT rates would not deter investment in property.
The comments have been made following speculation that Chancellor Rachel Reeves will force many property investors to leave the PRS if she raises CGT in this month’s Budget. And she appears to be listening to these warnings.
The Times newspaper yesterday claimed that Reeves is to omit an increase in CGT on rental properties and second homes and instead CGT to profits on share dealing.
But the IPPR says there are strong arguments in favour of increasing CGT on residential property to make it equal with income tax bands at 20%, 40% and 45%.
The current system unfairly rewards those who already own assets.”
Pranesh Narayanan, Research Fellow at the IPPR, says: “The current system unfairly rewards those who already own assets over those who contribute productively to the economy through work.
“UK house prices have appreciated by around 54 per cent since 2014. Someone who owned a property portfolio since then could do nothing with their assets and sell them today for a significant gain.”
Half size tax bill
“A gain of £1 million made passively over 10 years generates a tax bill half the size of someone who earned £100,000 a year over the same decade,” he says in a blog post.
He says raising CGT rates could be worth £14 billion and affect less than 1% of population. “Equalising Capital Gains Tax with the Income Tax schedule is one way to meet the Chancellor’s challenge,” he adds.
I think they have finally worked out that if they raise the tax they will raise less not more. We just won’t sell.
The real problem is with the new Renters Bill.
Will the banks be interested in loaning buy to let investors if they know how hard it’s going to be to evict non payers and how long it’s going to take. 40 years ago there was no buy to let and we are heading the same way. Are we heading back to only renting to company let’s and overseas tenants all over again?
I don’t know who the author interviewed but he must be deluded (or on the Governments propaganda payroll) if he thinks the average investor would willing want to pay more CGT.
Abolishing Capital Gains Tax should be on the agenda , this tax actually stops owners selling and makes them just borrow against the property . This stops new undeveloped property coming on the market with all the building works and money spending that a refurbished property would bring . My friend owned 300 properties over 50 years and he said it just wasn’t worth selling them , mind you at the time we had 40% Capital Gains and that was a disaster .
These people have not got a clue. I am surrounded by thick people in positions of influence. Us Landlords know why the homeless problem is catastrophic and getting worse.
Yet that bafoon says
Someone who owned a property portfolio since then could do nothing with their assets and sell them today for a significant gain.”
And passively.
Is office at 4am till 8pm doing nothing?
Following Council Selective Licensing rules 2 weeks solid 12 hours a day just on inspections passive is it?
How does he think the asset came around in the first place?
What if keeping that asset actually lost you money first few years?
And we don’t contribute productivity? Din’t realise we pay £1,000’s in VAT every year.
He’s just bought forward another dozens of Landlords to sell and the homeless has gone up yet again.