In a move that could send shockwaves through the property market, Labour's Deputy Leader Angela Rayner has unveiled potential plans for a significant tax overhaul targeting investors and second homeowners.
The party is considering a double-pronged attack on property wealth, with reforms to both stamp duty land tax and capital gains tax firmly on the table. These measures would represent Labour's most radical intervention in the housing market in decades.
Targeting the Buy-to-Let Market
Rayner confirmed that a future Labour government would likely reverse current stamp duty benefits for those purchasing additional properties. This would effectively eliminate the tax advantage enjoyed by buy-to-let investors and second homeowners under current rules.
'We are looking at all tax arrangements,' Rayner stated, 'particularly those that favour additional home ownership over first-time buyers trying to get onto the property ladder.'
Capital Gains in the Crosshairs
Perhaps more significantly, Labour is examining a major reform of capital gains tax on property sales. The party is considering aligning capital gains rates more closely with income tax rates, which could see the tax burden on property profits increase substantially.
This move would particularly affect landlords selling rental properties and those disposing of second homes, potentially generating billions in additional revenue for the Treasury.
A Return to Traditional Labour Values
These proposals mark a clear departure from the centrist approach of the Blair years and signal a return to more traditional Labour values of wealth redistribution. The measures are positioned as creating a 'level playing field' between ordinary homeowners and property investors.
Rayner emphasised that the changes would aim to make the tax system 'fairer for working people' while addressing the housing crisis that has priced many out of the market.
Industry Concerns and Political Reactions
Property industry experts have warned that such changes could destabilise the rental market and reduce investment in housing. Critics argue that increased taxes on landlords might lead to higher rents as costs are passed on to tenants.
The Conservative party has seized on the proposals, characterising them as yet another 'tax raid' that would punish aspiration and damage the economy.
With these proposals, Labour appears to be drawing clear battle lines for the next general election, positioning themselves as the party of tax fairness while risking alienating property owners and investors.
