Why are we taxing working people more than billionaires? Tax wealth, not work.  Gary Stephenson author of The Trading Game (2024)

Capital Gains Tax (CGT) is paid on houses that are usually called buy-to-let.¹ When sold, they are subject to CGT on capital profits. An owner-occupied home isn’t taxed. Selling owner-occupied houses usually generates windfall profits (see below). Capital generated from owner-occupied houses is privileged and very substantial amounts of untaxed capital creates a ‘cascade of wealth’.²

Britain’s owner-occupied housing is substantial. Nationally, its part of the wealth of the nation amounts to £8.7 trillion.³ Owner-occupied housing is two-thirds of Britain’s £12.2tr wealth.⁴ Successive governments ignore home-owners’ tax privileges. This reflects the biases of parliamentarians and, importantly, their voters.

People move house about every ten years⁵ and this is the guide period for this blog.

General inflation rose 38.4% between 2015 and 2025,⁶ with wage inflation outstripping that with a 43% increase.

London’s house price inflation 2015-25 was 99%⁷ comfortably exceeding general and wage inflation. London’s home-owners, on average enjoyed capital gains of about 56%. (Occasional short periods of negative inflation are blips.⁸)

Case Studies

Didsbury, Manchester Property sold in 2015 for £310,000 and for sale at £595,000 in 2025.⁹ This is a 92% increase in value. In cash terms it’s £285,000 over the decade, which is £2,375 per month tax free. The windfall profit is 49%.

Ocean Village, Southampton Property sold in 2013 for £395,000 and for sale at £600,000 in 2025.¹⁰ This represents a 52% increase in value. In cash terms that’s £205,000 over 12 years which is £1,420 per month tax free. The windfall profit is 9%.

Edinburgh Property sold in 2015 for £400,000 and re-sold in 2024 for £755,000.¹¹ This represents a 88.7% increase in value. In cash terms it’s £355,000 over nine years which is £3,290 per month tax free. The windfall profit is 45.7%.

Windfall profits taxed at 18% CGT

Not applying CGT means that home-owners are privileged. It amounts to a massive untaxed injection of capital into a specific group of people via untaxed windfall gains. A gigantic distortion of this sort encourages property flipping where ‘owner-occupied’ houses become a business. Houses are bought and sold to take advantage of the opportunity for a tax-free income.¹²

The case study sampled three houses across Britain which avoids the turbo-charged London housing market. However, “….the number of UK residential transactions in June 2025 is 93,530…”¹³ Those 93,530 CGT house sales could provide a multi-billion pounds revenue stream per month. This would be sharp improvement on enforcing poverty by salami-slicing the welfare budget.

Addendum: Windfall Taxes

“A windfall tax is a tax levied by governments against certain industries when economic conditions allow those industries to experience significantly above-average profits. Windfall taxes are primarily levied on companies in the targeted industry that have benefited the most from the economic windfall, most often commodity-based businesses….The primary objective of windfall taxes is to appropriate a portion of these extraordinary profits, which are perceived to exceed normal returns, for the public good.”(my emphasis)¹⁴

Notes

1 Guide to Landlord Capital Gains Tax | CGT Relief | Xero UK

2 Why the cascade of wealth has dried up | The Independent | The Independent

3 Savills UK | UK housing value hit a record high of £8.68 trillion in 2022 with gains favouring owner-occupiers rather than landlords

4 National balance sheet estimates for the UK – Office for National Statistics

5 Savills Blog | How long are people staying in the same home?

6 Inflation calculator | Bank of England

7 London: monthly house prices index 2015-2025| Statista

8 UK House Price Index – Office for National Statistics

9 4 bedroom terraced house for sale in Trafalgar Place, Palatine Road, Didsbury, M20

10 3 bedroom house for sale in Calshot Court, Ocean Village, SO14

11 House Price History

12 House flipping : Learn how to property flip in the UK | Finder UK

13 UK monthly property transactions commentary – GOV.UK 14 Windfall Tax: Definition, Purposes, and Examples