Labour call for higher Capital Gains Tax rise for some buy to lets

Labour’s Sadiq Khan wants an increase in Capital Gains Tax for some buy to let investors.

The London Mayor made his response to another Labour politician - Sam Moema - who was speaking out against the levels of overseas ownership of buy to let and other properties in the capital.

Khan says he wants the government to raise the empty homes premium for overseas owners of empty properties, increase capital gains tax from 28 per cent to 40 per cent for overseas buyers, and lift the rate of the Annual Tax on Enveloped Dwellings for overseas companies with large property portfolios in London.

Analysis published by the Centre for Public Data in November found that the number of property titles owned by individuals with an overseas correspondence address has more than doubled to exceed 247,000 since 2010. 

According to the research, The City of Westminster, Tower Hamlets, Kensington & Chelsea, Wandsworth and Southwark all had some of the highest numbers of property titles registered to overseas individuals and property companies.

Khan’s office claims that the Mayor’s proposed tax rises could raise £370 million a year and fund the delivery of almost 2,500 affordable homes.

Moema - who is Labour’s London Assembly housing spokesperson, says: “There is an acute housing crisis in the capital and the government have continually refused to provide [Sadiq Khan] and councils with the adequate financial backing to tackle it.

“We need to look at using all the tools at our disposal to fund the decent-quality, affordable homes that Londoners desperately need.

“Since 2010, there has been a surge in the number of properties being bought up by individuals and companies based outside of the country. All too often, these homes are left empty, whilst many thousands of Londoners are sleeping rough or trapped in the limbo of temporary accommodation.

“I agree with the Mayor that there is a big opportunity here for the government to take the bold and necessary step of increasing taxes on overseas owned properties and reinvest the revenues in opening up the housing market to thousands more Londoners”.