Spring Budget: PwC comments on residential property tax changes - CGT reduction 'one of the few outright tax cuts'

Alex Henderson, tax partner at PwC, comments on the reduction in the higher rate of property capital gains tax:

“The reduction in the top rate of CGT on residential property is one of the few outright tax cuts in the Budget although the number of people affected will be relatively small as most residential property sales benefit from 100% principal private residence relief from CGT.  

“The rationale is that cutting the rate will pay for itself through increased activity. More house transactions offer a non tax benefit in that more house sales ease a tight housing market and are positive for the economy. It's surprising therefore that more was not made of this line of thinking to reverse any of the tax rises of recent years whether on property or otherwise.”

Commenting on the abolition of the Furnished Holiday Lettings (FHL) tax regime from April 2025, Christine Cairns, tax partner at PwC, adds:

“This will remove tax incentives for landlords who let short term furnished holiday lets over those who let residential properties to long-term tenants by treating all rental receipts in the same way for tax purposes.  This tax simplification measure will not only save an estimated £600m over five years, it will support those who wish to live in their local area but who have so far had to compete with holiday makers for limited rental stock.”