Additional taxes unfair and risk disrupting the housing market, property owners say
Most UK homeowners are against the idea of extending capital gains tax (CGT) to main residences, results of a recent survey have revealed.
The research, commissioned by whole-of-market brokerage Boon Brokers, indicates that the majority believe such a change would be unjust and could have negative consequences for both the property market and the wider economy.
Currently, CGT does not apply to profits made from selling a primary home in the UK. The proposed reform would see this exemption removed or reduced for higher-value properties, making some of the gains from selling a main residence taxable. The details of the plan, including thresholds and rates, have yet to be finalised.
The survey, which gathered responses from homeowners across the UK, revealed that 97% do not consider taxing main homes to be a fair way to manage public spending. Furthermore, 73% said that the proposed change would be unfair, with many echoing the sentiment that “homeowners have already paid enough.”
A significant proportion, 71%, indicated they would be less likely to sell their main residence if the reform were introduced, suggesting the change could reduce the number of homes coming onto the market.
The data also shows that 39% of respondents believe the reform would negatively affect all homeowners, while 32% would prefer to see government spending reduced rather than new taxes introduced.
The research highlights concerns that taxing main residences could discourage property sales and add to the financial burden on ordinary homeowners. Respondents from all regions of the UK, including England, Scotland, and Wales, were united in their opposition to the reform. A previous report have shown that homeowners have also voiced concern about proposed amendments to Stamp Duty Land Tax (SDLT).
“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,” said Gerard Boon (pictured right), managing director at Boon Brokers. “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.”
The findings suggest that reluctance to sell would be seen across all age groups, with the highest resistance among those aged 55 and over. Younger homeowners also expressed concern, with 76% of those aged 18-24 saying they would be less likely to sell if CGT were applied to main residences.
Political implications were also noted in the survey. Some 78% of respondents said they believe the proposed tax change would reduce Labour’s chances of re-election, with 45% thinking it would have a significant impact and 33% expecting a slight impact.
When asked about the best way to balance public finances, the largest group (32%) favoured cutting government spending over raising new taxes. Other suggestions included targeting wealthier households or high net-worth individuals, and maintaining current exemptions while focusing on economic growth.
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