Where did you hear about us?
The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

London economy could lose almost £2bn from a rise in Capital Gains Tax

Real estate investment firm London Central Portfolio (LCP) has warned that a mooted rise in Capital Gains Tax (CGT) could result in a negative trickle-down effect on the wider economy in the capital. 

A report issued by the Office of Tax Simplification (OTS), requested by Chancellor Rishi Sunak, has considered an increase in CGT to align with current rates of income tax. The OTS report anticipates that this could bring an additional £14bn into the Exchequer and would include increasing the tax on the sale of all properties which are not the main home.

LCP looked at the effect of the previous property tax hike in 2016. The firm found that transactions slumped in Greater London by 25% year-on-year following the introduction of Higher Rate SDLT in April 2016, hitting a low not seen since the Global Financial Crisis.

  “If transactions followed the same trend following the implementation of the proposed CGT changes, an estimated £1.7bn per annum will, at least, be wiped annually from ancillary businesses in London, which service the housing market,” LCP stated, adding, “this damage would be exacerbated by an estimated £630m per annum loss in Stamp Duty and VAT receipts as property transactions fall and the service sector inevitably decreases.”

If you want to read more news subscribe