[p?c1=2&c2=6035250&cv=2.0&cj=1&cs_ucfr=0&comscorekw=Capital+gains+tax%2 CHousing+market%2CTax+and+spending%2CMoney%2CProperty%2CTax%2CHouse+pri ces%2CBusiness%2CPolitics%2CUK+news%2CEconomic+policy] Skip to main contentSkip to navigation Advertisement International edition [ ] * International edition * UK edition * US edition * Australian edition The Guardian - Back to home Search jobs Sign inSearch [ ] * News * Opinion * Sport * Culture * Lifestyle ShowMoreShow More * [ ] News + World news + UK news + Coronavirus + Climate crisis + Environment + Science + Global development + Football + Tech + Business + Obituaries * [ ] Opinion + The Guardian view + Columnists + Cartoons + Opinion videos + Letters * [ ] Sport + Football + Cricket + Rugby union + Tennis + Cycling + F1 + Golf + US sports * [ ] Culture + Books + Music + TV & radio + Art & design + Film + Games + Classical + Stage * [ ] Lifestyle + Fashion + Food + Recipes + Love & sex + Health & fitness + Home & garden + Women + Men + Family + Travel + Money * Make a contribution * Subscribe * Search jobs * Holidays * Digital Archive * Guardian Puzzles app * Guardian content licensing site * The Guardian app * Video * Podcasts * Pictures * Newsletters * Today's paper * Inside the Guardian * The Observer * Guardian Weekly * Crosswords * Search jobs * Holidays * Digital Archive * Guardian Puzzles app * Guardian content licensing site * Money * Property * Pensions * Savings * Borrowing * Careers Capital gains tax This article is more than 1 month old UK urged to tax £3tn windfall from 20 years of soaring house prices This article is more than 1 month old Thinktank says capital gains tax should be applied so poorer households are spared from paying more in tax Residential housing are seen by a view of the City of London financial district [ ] The benefits of the property boom had been disproportionately enjoyed by the better off, older people and those living in London. Photograph: Neil Hall/EPA The benefits of the property boom had been disproportionately enjoyed by the better off, older people and those living in London. Photograph: Neil Hall/EPA Larry Elliott Economics editor Thu 9 Dec 2021 00.01 GMT [ ] Last modified on Thu 9 Dec 2021 00.03 GMT * * * The £3tn windfall from soaring house prices in the past 20 years should be subject to a capital gains levy so that poorer households can be spared paying more in tax, a thinktank has urged. A report from the Resolution Foundation said the government should consider applying capital gains tax (CGT) to increases in the value of main residences in the UK as well as to sales of second homes, instead of increasing tax on income and profits. The thinktank admitted it would be a hard sell but said house prices had risen by 86% more than inflation in the past two decades and the gains had been “unearned, unequal and untaxed”. The increase in national insurance contributions and the 2023 rise in corporation tax will mean taxes as a share of the economy returning to levels last seen in the 1950s, yet property windfalls have been entirely absent from the debate, the Resolution Foundation said. Other capital gains attract tax rates of between 10% and 28%, and the benefits of the property boom had been disproportionately enjoyed by the better off, older people and those living in London, it added. Households over the age of 60 gained £80,000 in property on average, against less than £20,000 for the under-40s. For the wealthiest 10% of households it was £174,000, while the poorest third it was £1,000. Average gains in London (£76,000) were almost four times those in the north-east (£21,000). Adam Corlett, the principal economist at the Resolution Foundation, said the £3tn capital gains on main residences represented one-fifth of all wealth in the UK. “Choosing not to tax this huge housing wealth windfall because of the political and administrative challenges involved has real consequences, including higher taxes for workers and businesses,” he said. “With the government on course to raise taxes by an equivalent of £3,000 for every household in Britain by the middle of the decade, it’s time to reconsider a range of practical options for taxing these unearned windfall gains if we are to protect workers’ living standards in the years ahead.” IFRAME: business-today Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk None of the main political parties has indicated it would be willing to take the risk of angering homeowners, but Labour has been exploring the possibility of wealth taxes on shareholders. The Resolution Foundation report, which was conducted in partnership with abrdn Financial Fairness Trust, said levying CGT on main residences at 28% would raise £11bn a year – slightly less than the £12bn the Treasury will get from increasing national insurance contributions next April. Under the plan, property owners would be required to pay nothing until they exited home ownership or died. The thinktank said more modest proposals would still raise significant amounts. Setting a £75,000 allowance would mean more than half of estates would not have to pay any tax, while still raising £4bn a year. If unearned capital gains on a primary residence could no longer be covered by the inheritance tax residence nil rate band, up to £3bn would be raised. 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