Chancellor Rachel Reeves rules out CGT hike for buy-to-let properties in Budget?

Chancellor Rachel Reeves WILL NOT change the rate of capital gains tax on the sale of buy-to-let properties in the Budget, sources tell The Times.

According to the paper, the Treasury is concerned that increasing the rate could cost money and damage the property market.

The former Chancellor Jeremy Hunt cut the top rate of capital gains tax for property from 28% to 24%.

Pure hyperbole

According to The Times, Ms Reeves is likely to increase the current 20% tax rate applied to share sales and could extend this to other assets, while some reliefs in the existing system are expected to be eliminated.

A government source told the newspaper that the changes are anticipated to raise revenue in the “low billions.”

However, The Institute for Public Policy Research (IPPR) argues there is a strong case for raising capital gains tax on residential property to align it with income tax rates of 20%, 40%, and 45%.

Pranesh Narayanan, research fellow at IPPR, said: “The recent fearmongering from some that increasing capital gains tax will take the economy back to the stone ages is pure hyperbole. It was famously pro-growth Conservative chancellor Nigel Lawson who equalised capital gains tax with income tax rates in the first place.

“We have spoken to multiple millionaires in the last few weeks who have made it clear that equalising capital gains tax with income tax would make absolutely no difference to their investment or entrepreneurial pursuits.”

Mr Narayanan adds: “The current system unfairly rewards those who already own assets over those who contribute productively to the economy through work.

These people have no clue

Mick Roberts, one of Nottingham’s largest landlords for housing benefit tenants, labelled such arguments as “nonsense.”

He tells Property118: “These people have no clue. Those influencing the government are once again contributing to increased homelessness. How do they think these assets came about in the first place? Some of them lose money in the early years.

“As for productivity—didn’t they realize we pay thousands in VAT every year? His approach is only pushing more landlords to sell, leading to even more homelessness.”

Increases in inheritance tax

This follows a BBC report suggesting that inheritance tax increases are expected in the Budget.

However, it remains unclear how many people will be affected or how much more they would have to pay.

When asked by the Treasury about the reports of capital gains tax and inheritance tax a spokesman for the Treasury told the BBC: “We do not comment on speculation around tax changes outside of fiscal events.”

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