Talk of the Labour Party Chancellor, Rachel Reeves, looking at a new levy on expensive homes or removing CGT exemption is making buyers wary.
A new property tax in England is slowing down the housing market, UK agents have warned. Talk of the Labour Party Chancellor, Rachel Reeves, looking at a new levy on expensive homes or removing HMRC CGT exemption is making buyers wary.
Ms Reeves is reportedly considering a tax on the sale of homes over £500,000 and the removal of the capital gains tax exemption on primary residences above £1.5m as ways to boost income for the government.
The property website Zoopla said changes to the taxation of homes over £500,000 “may make some buyers consider a wait-and-see strategy. This covers those who may possibly save money on purchases under £500,000 and concern those buying over this level as well.”
READ MORE Bank Holiday change for England households in 2026 with date moved
It said a third of homes for sale were priced at more than £500,000, with London and the south-east of England in line to be most affected by a change.
Richard Donnell, an executive director at Zoopla, said: “Sellers need to understand local market conditions when considering how to market their home, setting the right price and how quickly they would like to sell. The risk of being too ambitious on price is your home taking more than twice as long to find a buyer, or not selling at all.”
Jeremy Leaf, an estate agent and former chair of the Royal Institution of Chartered Surveyors, said: “The market inevitably lost a little steam over the summer period with so many decision makers away and listings continuing to pile up.”
He said agreed sales were going ahead but added: “Unfortunately, perhaps the government do not appreciate that even rumours of a new property tax can have a detrimental impact on housing market confidence and activity, which we certainly witnessed on the ground since the story broke last week.”
after newsletter promotion
Tom Bill, the head of UK residential research at Knight Frank, said: “A price-sensitive housing market has become a whole lot more price-sensitive over the last fortnight thanks to the speculation around property taxes.”
He said that in the run-up to the budget there could be “weeks of more speculation in a tiresome re-run of 2024 that will keep a lid on transaction activity and stamp duty revenue”.