A group of millionaire investors and business leaders has publicly backed raising Capital Gains Tax (CGT) for landlords, according to a new report by the influential think tank IPPR. These wealthy entrepreneurs argue that higher CGT rates would not discourage property investment, as speculation mounts over potential tax changes in the upcoming Budget.

The calls for reform come amid concerns that Chancellor Rachel Reeves may drive property investors out of the Private Rented Sector (PRS) if she increases CGT on property. However, recent reports suggest Reeves may sidestep a CGT hike on rental properties and second homes, focusing instead on profits from share dealing.

A report in The Times this week indicated that the Chancellor is likely to omit plans to raise CGT on property in her Budget announcement, responding to warnings from the sector. However, the IPPR report maintains that raising CGT on residential property to align with income tax bands—currently set at 20%, 40%, and 45%—would create a fairer system.

Pranesh Narayanan, a research fellow at the IPPR, highlighted the current disparity in the tax system, which he says rewards asset owners more than workers. “UK house prices have appreciated by around 54% since 2014. Someone who has done nothing but hold onto their property portfolio during this time could now sell for a significant profit,” Narayanan said.

He pointed out the stark contrast in tax burdens. “A gain of £1 million made passively over 10 years generates a tax bill half the size of someone who earned £100,000 a year over the same period,” he added.

According to Narayanan, equalising CGT with income tax could raise £14 billion and would only impact less than 1% of the population. “This is one way to meet the Chancellor’s challenge while ensuring a more equitable tax system,” he said.

As the Budget approaches, all eyes are on Reeves to see whether she will heed these calls for reform or prioritize investor concerns about the PRS.