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UK homeowners deem proposal to extend CGT to higher-value primary homes 'unfair'

Journalist: Alina Khan

ended 21. October 2025

I am doing an analysis on the government's proposal to extend CGT to higher-value primary homes.

Research by Boon Brokers found sentiment among UK homeowners was that it is unfair and potentially damaging to the housing market.

Many believe it would discourage property sales, place additional strain on ordinary homeowners, and that the government should instead focus on reducing public spending.
 

  • Will these proposals truly be damaging for the housing market?
  • Are there alternative policies Reeves could explore which would still raise revenue but not have as much of a negative impact?
  • What are the pros and cons of this proposal?

6 responses from the Newspage community

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Editor
Eamonn PrendergastVerified
Chartered Financial Adviser at Palantir Financial Planning Ltd
Turning homes into tax targets risks trapping families and locking generations out of the property ladder. Extending capital gains tax to main residences would be one of the most damaging policy moves in decades. It might sound like an easy revenue raiser, but in practice it would paralyse the housing market, discourage downsizing and trap families in homes that no longer suit their needs. The UK already has one of the most heavily taxed property systems in the developed world, with stamp duty, council tax and inheritance tax all adding pressure. Rather than layering on more tax complexity, the focus should be on simplifying the system and supporting mobility, freeing up family homes and stimulating growth. There are better ways to raise revenue than taxing aspiration. Policies that encourage efficient use of property and fairer regional investment would do far more to strengthen the housing market and restore confidence.
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Pete MuglestonVerified
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
This policy would mark yet another government U-turn after Keir Starmer ‘absolutely’ guaranteed it wouldn’t happen during Labour’s first parliament. Like stamp duty, it would discourage downsizing and the revenue raised would be unpredictable. The government should instead urgently reform council tax, which is still based on 1990s property values. A modern, progressive system would raise revenue from concentrated housing wealth in a fairer and more balanced way without discouraging mobility.
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Kundan BhaduriVerified
Entrepreneur, Investor and Landlord at The Kushman Group
The Chancellor seems determined to freeze the housing market while collecting precisely zero revenue from homeowners who simply refuse to move house. Reeves' mooted threshold remains conveniently vague, but speculation suggests homes above £1.5 million would face CGT at 24 percent on gains. In practical terms, this transforms anyone with a decent family home in Guildford or Greenwich into a property prisoner, trapped by their own success. Sellers are going to vanish, and obviously the buyers will also disappear leading to entire transaction chains collapsing like dominoes. Property has always been Britain's quiet path to genuine wealth creation. Taxing primary residences destroys that foundational truth. If Reeves genuinely needs revenue, she should modernise council tax bands or streamline stamp duty properly.
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Omer MehmetVerified
Managing Director at Trinity Finance
Extending capital gains tax to higher-value primary homes would be politically explosive and economically damaging. It risks freezing the market overnight as homeowners delay selling, especially in areas where property values have risen through no fault of their own. The move would punish long-term ownership rather than speculative gain. If the government wants to raise revenue fairly, it should focus on reforming council tax bands and closing loopholes on genuine investment property, not taxing family homes. A functioning housing market depends on mobility, and this idea would strangle it.
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Patricia McGirrVerified
Founder at Repossession Rescue Network
Extending Capital Gains Tax to main homes would risk choking the housing market rather than boosting public finances. Even floating the idea has already made buyers and sellers think twice, which slows down sales and knocks confidence through every link in the chain. This would not just touch the wealthy. It would trap families in homes they need to move on from and reduce the number of properties coming to market. If the government wants to raise money fairly, it should modernise council tax bands and deal with long-term empty or speculative properties instead of targeting ordinary homeowners who are already under immense pressure.
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Clive Bonny0
MD at Strategic Management Partners
The economy relies on 4 million small enterprises. Over one million are home office workers in London and south east who rely on extra bedroom space to design, make, market and sell online whilst making a very small profit. The average self-employed homeworker earns under £30kpa. Any increase in rates will result in an increase in many of those tax payers folding and returning to state support. The current Labour government has not a single cabinet minister who has run a self employed small enterprise who understands this. The result? Another policy change with no economic risk analysis and which makes no economic sense. Taxpayers will be footing another bill for several years.