Brendan Burgess
Founder
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If you don’t have wealth you have to buy access to it from after tax income. If you have wealth you are not taxed on it at all. If our objective is to have a fair and equitable taxation system then we need to significantly increase property tax on PPR’s while at the same time reintroduce mortgage interest relief for PPR’s.
Purple made the above point in another thread about how we tax income and don't tax wealth.
I support the Local Property Tax.
But I wonder should we review the CGT exemption on the PPR.
I don't think we should treat it in exactly the same way as any other investment, but I don't think it should be entirely exempt either.
Those of us who were able to afford homes have accumulated a fair bit of wealth. Some research suggests that many more people will never be able to afford their own home.
Could something be done to balance the two out a bit?
I certainly don't see why someone living in a €5m home should get full exemption from CGT.
Some options
1) Charge CGT on the market value of the property on the death of the owner. This would be essential as most people stay in their family home for life. Without this, there would be no benefit in introducing a CGT on the PPR.
2) Limit the PPR exemption to a lifetime figure of €200k. That is still a huge exemption.
3) Roll over any CGT liability on the PPR if the seller buys a new property. This would be necessary to avoid any disincentive to trade-up or trade down. The CGT would be a charge on the new home and payable on death.
4) Maybe introduce an incentive for people to encourage people to trade down.
Indexation should be introduced, so only real gains above the normal level of inflation would be subject to tax.
5) Would there be some way of ringfencing the tax generated by this measure to help younger people get on the housing ladder? For example, abolish VAT on starter homes bought by FTBs? And fund this through the CGT measures.
Brendan