Tax ‘unearned’ £3tn house price rise windfall, says think-tank and abrdn
The Resolution Foundation and abrdn have called a £3tn rise in the value of Britain’s homes an “unearned, unequal and untaxed windfall”.
A new report has called for capital gains tax on the rises, as well as on sales of second homes, instead of increasing tax on income and profit.
House prices have risen by 86% above inflation since 2000, delivering a capital gain on homeowners’ main residences of £3tn, according to research by the Resolution Foundation think-tank and abrdn Financial Fairness Trust.
The Resolution Foundation and abrdn have called a £3tn rise in the value of Britain’s homes an “unearned, unequal and untaxed windfall”.
A new report has called for capital gains tax on the rises, as well as on sales of second homes, instead of increasing tax on income and profit.
House prices have risen by 86% above inflation since 2000, delivering a capital gain on homeowners’ main residences of £3tn, according to research by the Resolution Foundation think-tank and abrdn Financial Fairness Trust.
The figure equates to a fifth of all wealth in Britain.
The least wealthy third of households have gained less than £1,000 per adult on average, compared with an average gain of £174,000 for the wealthiest 10%, the research shows. Homeowners aged 60-plus have gained an average of about £80,000 each, compared with a paper profit of less than £20,000 for under-40s.
In London, the average capital gain since 2000 stands at £76,000, compared with £21,000 in the north east of England, the report found.
Resolution said the one-off rise in the value of homes should be “part of the debate” on how to repair the public finances.
If the gains built up over the past 20 years were taxed at a 28% rate of CGT, it would raise around £11bn a year, it said.
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