Brown considers house sales tax

THE Government is considering plans to impose capital gains tax (CGT) of up to 40% on the sale of all homes, according to newspaper reports.

In Britain, only second homes attract the levy but it is thought Chancellor Gordon Brown is examining plans to bring the country into line with continental Europe.

It would also raise £11bn a year for the Treasury - equivalent to 4p on the basic rate of income tax.

City tax consultants confirmed that discussions had taken place with the Treasury and that Brown was keen to tax people who make short-term speculative gains on property. Such a move would fit with the Chancellor's desire to calm the property market and would help plug the Treasury's growing budget deficit.

In Germany, CGT is levied on any home sold within 10 years of purchase. In France, the tax is reduced on a sliding scale the longer an owner has lived in the property.

One possible option for Britain could be a tax on properties valued at £500,000 or more. The discussions are said to be at an early stage.