Landlords could have faced Capital Gains Tax bills more than £15,000 higher if rates had been aligned with income tax, analysis from The Letting Partnership suggests.
The calculation follows reports that Chancellor John Healey has rejected calls to increase CGT rates in next week’s Autumn Budget.
The Letting Partnership estimates that an additional-rate taxpayer selling a property that had tracked average UK house price growth over the past decade could have faced an illustrative CGT bill £15,633 higher if the rate had risen from 24% to 45%.
For a higher-rate taxpayer, moving from the current 24% CGT rate to a 40% rate would have increased the illustrative liability by £11,911.
£74,000 GAIN
The analysis uses average UK house prices, which increased from £198,169 in July 2016 to £272,611 in July 2026 – a gain of £74,442.
Applying a 24% CGT rate to the full gain produces an illustrative liability of £17,866.
At 40%, that would rise to £29,777, while applying a 45% rate would produce a £33,499 bill.
The calculations exclude allowances and other deductible costs and are intended to illustrate the potential effect of changing tax rates rather than the CGT liability faced by an individual landlord.
LANDLORD PRESSURES
Chris Mason (main picture), Chief Operating Officer at The Letting Partnership, says: “The Chancellor’s decision not to pursue an increase in Capital Gains Tax will come as a welcome relief to landlords, particularly those who have seen the value of their investment properties increase substantially over the last decade.
“Aligning CGT with income tax rates could have added more than £15,600 to the tax bill of an additional-rate taxpayer selling an average property.
“At a time when landlords are already facing considerable financial and regulatory pressures, avoiding such a significant increase is undoubtedly a positive outcome.”
Mason says landlords nevertheless continue to face tax and regulatory changes and argues that the cumulative impact could affect confidence and investment in the private rented sector.
He adds: “The decision to reject calls to raise CGT is a welcome step in the right direction, but landlords need more than the avoidance of further tax increases.
“They need a stable and supportive environment that gives them the confidence to remain in the sector and continue providing much-needed rental homes.”
