Been thinking about this today. People already pay CGT on 2nd homes but given that housing is being used as an investment vehicle by virtually everyone in the UK, does it make sense to apply it to single homeowners too?
Would have to ignore the current govt's pledge to not raise taxes but with national debt at over 100% of GDP and us spending over 100 billion pounds a year in interest alone... not sure that is sustainable.
Thinking it through, house prices would fall since they would immediately be a less desirable commodity. Although they wouldn't plummet because houses still have intrinsic value and the supply of houses being sold would begin to dry up as people are dissuaded from selling.
The rental housing supply would increase in terms of properties since it would be more profitable to let them out than sell them. An increase in supply would reduce the cost of rent. It would need to come in with an increase in renter protection laws. Focusing on long term rented properties as family homes works well for other countries like Germany.
At the moment we've got a situation where people buy the most expensive house they can possibly afford because it has the best return of any investment by being exempt from CTG. In theory, people might buy more modest homes if they are buying and potentially could put more money into stocks/indexes which would stimulate the wider economy.
Anyway, this was more of a showerthought than anything else. What do you think?
People who own one home aren't looking at it as a commodity, at least not primarily. It's their home. Capital Gains on single-home households would just disadvantage people who may already be struggling; imagine for example a young family who needs to upsize so they have room for the new baby, or a young professional looking to move closer to work.
Yeah makes sense. I suppose I was imagining it being implemented as a last resort like say the government had a choice between cutting benefits more or taxing middle class homeowners then it would be the lesser of two evils.
The middle class does not exist. Also, if you think home ownership makes someone middle class then that demonstrates how badly things have gone.