A think tanks proposes capital gains tax on all UK properties to curb house price growth
The National Institute of Economic and Social Research (NIESR) has proposed a CGT on UK properties and the scrapping of stamp duty.
“At present our taxation of housing is possibly the worst of all worlds. We tax the purchase of houses by stamp duty, which limits the efficient allocation of housing and labor mobility. Council tax has no connection to existing property values. Unlike other assets the income and capital gains on primary residences are untaxed. No attempt is made to tax the excess returns on housing which accrue because of its relatively fixed supply,” NIESR said.
According to NIESR, a CGT would “reduce the gains in an upturn and losses in a downturn, so dampening house price cycles.” It could also “reduce the resistance to planning, reduce ‘under occupancy,’ and even increase the flow of savings in productive investment.”