The National Residential Landlords Association has asked the Treasury to overhaul capital gains tax for landlords, arguing that roughly four-fifths of the tax paid on gains since 2015 has reflected inflation rather than a real increase in property value.
The trade body sent its Budget submission to the Treasury this week, ahead of next month’s Budget. It wants any future CGT calculation to recognise the original purchase price, Stamp Duty, acquisition costs, improvement spending and the length of ownership.
That proposal puts tax treatment of a sale back on the agenda at a point when many landlords are weighing whether to retain, refinance or dispose of property. The NRLA is not asking ministers simply to cut CGT. Its case is that inflation should not be taxed as though it were investment growth.
NRLA puts inflation at the centre of CGT case
The association says average UK house prices rose 46.2 percent between 2015 and 2024, while general inflation rose 34 percent. On its calculation, the real increase in house prices over the period was 9.1 percent.
It says that difference explains why around four-fifths of CGT paid on property gains during those years related to inflation. The proposed approach would make relief dependent on the length of ownership, with taxable gains based on the value increase after inflation and recognised costs.
The submission also argues that a higher CGT rate on second homes would only be workable as part of a wider package, rather than a stand-alone revenue measure. It calls on ministers to resist aligning CGT with income-tax rates.
This follows Landlord Knowledge’s August report on HMRC’s record £24.2bn capital gains tax liabilities, which showed the scale of receipts now tied to asset disposals. The NRLA’s latest submission focuses instead on how the gain itself should be measured when a landlord sells.
Budget submission links tax to rental supply and retrofit
The NRLA says a system focused on real gains could make it easier for owners to release capital and reinvest, including in energy-efficiency work. It has paired the CGT proposal with calls to reverse the Local Housing Allowance freeze and invest in the retrofit workforce.
That is a political argument rather than a confirmed policy change. The Treasury has not announced an alteration to CGT rules, and the Budget will determine whether any of the proposals gain traction.
Landlords considering a company route should also separate a broader debate about future CGT from the rules that already apply to a transfer. Landlord Knowledge previously covered the capital gains tax rule change affecting landlord incorporations; relief depends on the facts of each business and should not be assumed from a Budget proposal.
The association’s Budget submission puts the case for indexing real gains and recognising property costs. It does not set a new tax rate or create a new relief, so landlords should continue to use the current CGT rules when planning a disposal.
What this means for landlords
- If you are considering a sale: keep a complete record of the purchase price, Stamp Duty, legal fees and capital improvement costs. They are already important to a current CGT calculation and sit at the heart of the NRLA’s proposal.
- Watch for: the next month’s Budget and any Treasury response on CGT rates, allowances or how gains are calculated. No change has been announced.
- If you are incorporating: do not treat a possible reform as a substitute for specialist tax advice. Incorporation relief and transaction costs need their own assessment.
- For energy upgrades: retain invoices and evidence of capital work. The submission explicitly links tax treatment to the ability to reinvest in rented homes.
- Bottom line: the NRLA has opened a fresh argument about inflation within landlord CGT, but the law remains unchanged until ministers act.
Editor’s view
The case is politically awkward but easy to understand: a paper gain inflated by years of price rises is not the same as a windfall. The Treasury will be wary of the cost, yet a CGT debate that ignores the timing and quality of landlord sales will miss part of the rental-supply picture.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 11 September 2026
Sources: National Residential Landlords Association Budget submission
Related reading: HMRC: capital gains tax liabilities hit £24.2bn record
