Can we please be clear about what we are talking about before you attack any more straw men? I originally said that I thought it would be reasonable if we capped the current exemption from CGT on the sale of a PPR in a similar manner to the position in the US. That would have zero impact on the vast, vast majority of homeowners. It would only impact homeowners that realise a very substantial profit on the sale of their home. I'm not too fussed about where the cap is set but I think the principle that somebody can make huge tax-free profits on the sale of their home is wrong. That's just my opinion - you are obviously free to disagree.
All revenue from the LPT (which is exceptionally low by international standards) accrues to local authorities with consequent off-setting reductions in financial support from the central exchequer. It is payable on all residential properties (with limited exemptions) and has no connection whatsoever with the current uncapped exemption from CGT on any gains arising on the disposal of a PPR.
We all pay VAT on various products and services. You obviously don't have to own a property to pay VAT. Again, there is no connection between VAT and the current uncapped exemption from CGT on any gains arising on the disposal of a PPR.
If you make the argument that we should remove CGT exemption and reference the services that are funded by LPT (e.g. roads) as justification then you are the one linking them and it is entirely legitimate to attack that argument. No straw men involved.
VAT is a contribution to the exchequer. Property tax is a contribution to the exchequer.
The state are not being left out of pocket either from the inherent value of the property or from the rise in its value.
Maintaining a property has costs which also have contributions to the exchequer.
So we have a direct tax on the property AND indirect taxes such as VAT attached to its upkeep.
But still that's not enough???
You cannot use the same argument to justify the tax on the services and the tax on the property and then turn around and say we need to use CGT to pocket even more contributions.
One of the arguments you used as justification was that the property has inherent value because of its access to services provided by the state.
How is it a straw man to point out that that is the purpose of property tax? And also development levies if it was a recent build?
Incidentally, you were arguing on another thread in favour of the State subsidising the purchase of private residences through MIR. Do you think that it's fair, in principle, that somebody can make substantial tax-free profits on the sale of an asset the purchase of which was subsidised by the State? Genuine question.
Yes, it is not tax free that needs to be justified, it's tax. The default position should be tax free.
If a legitimate argument has been made to tax X because we need to fund services and the actual tax is related to the value of X, there's no longer any justification for turning around and taxing X again because its value has increased quoting the same services.
Abolish PPR property tax, then talk about removing the CGT exemption on PPRs if you want to have any chance of convincing me that that justification has real merit.
As for fairness... if the property increased in value by €250,000 how does the state lay fair claim on that increase when it cannot show that it was its actions or expenditures that caused the increase? The property increasing in value by €250,000 does not result in more public expenditure, or more demands on the police's time, or the health service's resources. If the property has not increased in value the commitments on the state's resources would be identical.
No additional state resources were consumed in adding value to the property.
In theory a re-balancing of CGT so that CGT across the board is reduced, with the introduction of CGT above a certain limit on PPRs could make sense.
As you mentioned, encourage investments rather than money into property.
But that'd be in theory, I would not trust this government to carry out such a re-balancing! I could see people putting money into investments on the basis of lower CGT only for a future government to put it back up.
