Cabinet ministers are examining proposals to equalise Capital Gains Tax with income tax rates, a move that could significantly increase tax bills for landlords selling investment properties.
A draft paper circulating among senior Labour figures proposes a major overhaul of the tax system that would see property investors paying the same rates on asset sales as they do on earned income – potentially pushing CGT rates to 40 or 45 percent for higher earners.
Think tank proposals gain traction
According to Sky News, the paper has been reviewed by several cabinet ministers and potential leadership contenders, including advisers to Health Secretary Wes Streeting, former deputy prime minister Angela Rayner and Greater Manchester Mayor Andy Burnham.
The report, produced by the Labour Growth Group and Good Growth Foundation, argues for a complete overhaul of Labour’s economic strategy. While it proposes cutting income tax and potentially abolishing National Insurance to incentivise work, the funding would partly come from higher taxes on capital gains, land values and reformed council tax.
This follows Landlord Knowledge’s report that limited company purchases now account for 43 percent of buy-to-let transactions, with many landlords already restructuring to manage their tax exposure.
Publication expected after May elections
The full report is expected to be published after the May local elections – a timing that political analysts note coincides with a potential leadership challenge if Labour performs poorly at the polls.
Mark McVitie, director of the Labour Growth Group, said the party must confront “vested interests profiteering from the cost of living crisis” and focus on “rewarding work and taking initiative”.
The proposals echo recommendations made to then-Chancellor Rishi Sunak in 2020, when the Office of Tax Simplification examined CGT equalisation as a way to raise revenue. Those discussions triggered evidence of accelerated landlord exits from the private rental sector.
What this means for landlords
- If you’re planning to sell: Current residential CGT rates of 18 percent and 24 percent could rise to match income tax rates of up to 45 percent if these proposals progress – timing of disposals may become critical.
- Watch for: The full report publication after May elections and any subsequent policy announcements from HMRC or Treasury.
- Bottom line: These are think tank proposals, not government policy – but their circulation among leadership contenders suggests the direction of travel for future tax debates.
Editor’s view
The political reality is that landlords represent a convenient target for tax rises. While these proposals remain speculative and face significant practical challenges, the direction of travel is clear. Landlords should review their portfolio structures and exit strategies with professional advisers – not in panic, but in recognition that tax treatment of property investment is unlikely to become more favourable.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 24 March 2026
Sources: Sky News, Labour Growth Group, Good Growth Foundation
Related reading: Portfolio landlords urged to review structures ahead of April 2027 tax rise
