Media: Department of Finance Working Group propose CGT on Family Homes

The_Conductor

Scarey story in this morning's Irish Times- where the Department of Finance are exploring proposals to tax capital increases in the value of family homes.

This would be a sure fire way of killing the concept of a 'starter home' and moving to a 'forever home' as someone's circumstances change.

I suspect the proposal will come to nought- they fly these kites in Department Working Groups- from time to time- however, this one would be too toxic to put any effort into implementing.

mirrorwall14

The_Conductor wrote: »

Scarey story in this morning's Irish Times- where the Department of Finance are exploring proposals to tax capital increases in the value of family homes.

This would be a sure fire way of killing the concept of a 'starter home' and moving to a 'forever home' as someone's circumstances change.

I suspect the proposal will come to nought- they fly these kites in Department Working Groups- from time to time- however, this one would be too toxic to put any effort into implementing.

Cannot see any government implementing that considering the family home is like a sacred cow even if the mortgage is not being paid.

Although having read the article, I don't think its unreasonable to suggest that the money going into the purchase of a new home is exempt. Anything above that subject to CGT. That may fly.

Full CGT will never get through in my opinion

4ensic15

Stamp duty on the new house was effectively the tax on the captital gain on the sale of the old house. A much better system.

The_Conductor

4ensic15 wrote: »

Stamp duty on the new house was effectively the tax on the captital gain on the sale of the old house. A much better system.

It was only supposed to be a transactional cost- not a tax.
I understand what you're saying- but the manner in which it morphed into an income stream for the government last time round- was one of the things that screwed us over when property volumes fell off a cliff.
All it would take is an increase in interest rats to ignite a similar issue here here again.

4ensic15

The_Conductor wrote: »

It was only supposed to be a transactional cost- not a tax.
I understand what you're saying- but the manner in which it morphed into an income stream for the government last time round- was one of the things that screwed us over when property volumes fell off a cliff.
All it would take is an increase in interest rats to ignite a similar issue here here again.

It was always a tax and still is on transactions. The revenue stream from capital gains tax is also transaction dependent. When the rate of CGT dropped there were more transactions. When it rose there were fewer. the result is that there is less income from CGT despite higher rates.

Jill Kerby was just on Sean O'Rourke and his text machine from the listeners seems to have gone on fire.

Property is the untouchable in this country.

karenalot

As someone who has a parent who is thinking of downsizing something like this would squash the idea for them. House was bought in Dublin in the 70's for less than 15k so pretty much the whole of the current property value would be subject to CGT. The below scenario quoted from the article also stops anyone selling their house to move abroad or retiring to the sun.

The officials write that some countries already restrict the freedom of the family home from capital gains tax. In Portugal, they note, the sale of a family home is tax free only if the entire profits are invested in a new home within that country.

I'd imagine if it were to be introduced, a very large threshold would have to be set initially. A lot of people don't have problems with rich people being taxed so less uproar. Not an issue of course for anyone who bought in the boom.