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The chancellor of has handed a massive tax break to more than a million second home owners, the Evening Standard reveals today.
The tax rate on profits from sales of holiday homes or buy-to-let investments has been slashed from as much as 40 per cent to 18 per cent from next April.
The move fuelled speculation at Westminster that Labour rushed out a "botched"pre-Budget report in response to Conservative tax proposals added to which there were further signs of disarray when Gordon Brown was humiliated by David Cameron in a Commons clash today.
The cut in capital gains tax announced by Alistair Darling yesterday was mainly aimed at increasing the tax paid by wealthy private equity bosses who currently enjoy a 10 per cent rate. But tax experts said it had inadvertently handed a major tax break to second home owners and will save them thousands of pounds when they sell. Andrew Goldstone, head of personal tax and estate planning law at Mishcon de Reyna, said:"It's a massive tax cut for property owners. Hardly what you'de expect from a Labour government, traditionally against fat-cat property investors. I can't see there are many votes in saying, 'we're cutting tax for property investors'. surely it's a gift for the Tories".
Owners pay CGT - a tax on the difference between the price they paid for an asset and the price they sell it for - on all homes except the one they live in. The rate is currently 40 per cent for the first three years that the property is owned, falling by two per cent a year to a minimum rate of 24 per cent after ten years of ownership.
The move by Mister Darling was aimed at making wealthy private equity bosses who enjoy a ten per cent tax rate after two years under "taper releif" rules, pay more. 
As well as hitting private equity bosses, Mr Darling's new flat rate of 18 per cent is designed to simplify the system by bringing the rate for business and non-business assets such as holiday homes in line with each other. 
Now the experts say the move looks certain to boost the property market next year, although it could mean a dramatic drying up of supply until April. 
Liam Bailey, head of residential research at Knight Frank, said: "This will help underpin demand for second homes and prices of second homes. However, the second home market prices are very expensive in most parts of the UK and affordability is the key to demand."
Someone buying a holiday home or a buy to let property for £200,000 and making a taxable gain of £100,000 previously faced a bill ranging from £40,000 to £24,000. Under the new regime, they will only be liable for £18,000, a saving of up to £22,000. 
Chris Norris, policy officer for the National Landlords Association, said: "We're very happy with what we've seen. Our members will be able to understand the system more clearly and make more savings."