A section of Propertymark has come out against a possible Capital Gains Tax rise in this month’s Budget.
NAVA Propertymark – the valuers’ wing of the trade body – has warned against the dangers of increasing CGT at a time when confidence is returning to the housing market.
In April former chancellor Jeremy Hunt cut the higher rate of CGT from 28% to 24%, thereby impacting landlords and second homeowners who decide to sell, while the lower rate will remain at 18 %.
The Office for Budget Responsibility in its March 2024 Economic and Fiscal Outlook stated that a cut in CGT payable on residential property gains would boost property transactions by roughly 2%.
However, with Chancellor Rachel Reeves reported to be considering increasing GGT to fill the ‘£22 billion black hole’ in Britain’s finances, NAVA Propertymark has warned that such a move could jeopardise growth in the housing sector during a period when it needs it the most.
Spokesperson Richard Worrall says: “The Bank of England cutting interest rates should help stimulate growth in the housing market, which is fantastic news for those who are hoping to purchase their next home.
“However, if the Chancellor increases the higher rate of Capital Gains Tax, this could reduce the number of property transactions on the market at a time when full confidence needs to be restored to the housing market, especially when encouraging housing growth is a central part of the new UK Government’s mission.”
