LibDems plan £1m property sales tax

THE LIBERAL DEMOCRATS are drawing up plans for capital gains tax (CGT) to be levied on the sale of homes worth more than £1m in exchange for their support for the scrapping of the 50p tax rate.

Senior LibDems will tell chancellor George Osborne that the scheme must be implemented before the next election if he wants to abolish the 50p tax rate, the Daily Mail reports. Business secretary Vince Cable (pictured) suggested previously that there should be a 1% annual levy on all homes worth above £1m.

Under the scheme, the 28% CGT rate will be levied on profits over and above the £1m threshold. Around 250,000 homes would be above the £1m threshold and last year 7,185 properties were sold for a seven figure sum.

The Mail also reports that VAT on home improvements could be reduced to 5% to encourage owners to renovate rather than sell, while stamp duty could be scrapped for lower earners.

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