Proposed Mansion Tax on Luxury Homes to Address £40bn Public Finance Shortfall
Chancellor Rachel Reeves is considering ending the capital gains tax exemption for primary residences to target high-value property owners, aiming to fill a £40bn shortfall in public finances. This proposed 'mansion tax' would impose a 24% capital gains tax on higher-rate taxpayers and 18% on basic rate taxpayers for properties above a £1.5m threshold. The move, expected in the autumn budget, could impact around 120,000 homeowners. Treasury minister Torsten Bell stated any changes are matters for the chancellor. Critics warn it may deter home sales, slow the housing market, and disproportionately affect older homeowners. The government faces challenges in raising funds without increasing taxes on 'working people', as highlighted by the NIESR think tank's warning of a £41bn shortfall by 2029-30.