Chancellor Rachel Reeves is weighing ending private residence relief for homes above a threshold potentially set at £1.5 million to help close a £40 billion funding shortfall. The change would subject high-value primary residences to capital gains tax at 24% for higher-rate taxpayers and 18% for basic-rate taxpayers. Treasury estimates suggest about 120,000 homeowners could be affected and a sale at £1.5m could trigger a CGT bill near £200,000. Analysts warn the measure could reduce housing supply as owners delay sales, hit pensioners who downsize, create a cliff-edge at the threshold, and may raise less revenue if limited to recent gains.
It's a big change that would hit long-term owners hardest and create a cliff-edge at £1.5 million. While headline gains look substantial, they're often the result of decades of ownership. For households who don't need to move, this could be a strong disincentive to sell, dampening transactions and potentially weighing on house price growth and Treasury revenues alike.
Prices in prime central London are down 20 per cent over the last decade. If demand fell further, the pr
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