Wealth & assets Home county Options for taxing main residence capital gains 9 December 2021 Adam Corlett Jack Leslie Over the past 30 years, the total value of household wealth in the UK has risen from three times national income to well over seven times. Inflation-beating house price growth and high ownership rates have combined to add around £3 trillion of housing wealth from main residences to that total – accounting for around a fifth of all British family wealth today. This report provides new analysis of the huge unearned, unequal and untaxed capital gains on main residences, shows that they create unwanted economic side effects such as low home ownership among the young, and sets out how the tax system could be reformed in response. Main homes, unlike other assets, are not subject to Capital Gains Tax. Which, combined with the limited scope of Inheritance Tax, means a substantial driver of rising wealth in the UK is being ignored by the taxman. At a time when taxes on earnings and businesses are rising, it is worth exploring whether reforms to Capital Gains Tax might be a source of additional revenue – either allowing for lower taxes elsewhere or greater investment in public services.