(a) The increase in the value of a residential property in theory could lead to an LPT liability.
(b) You now accept that they are probably making a contribution to the exchequer?
(c) Please explain how the increase in the value of the asset is attributable to public expenditure. You said that the value of the asset is partly attributable to public expenditure but if it is the core value of the asset that is in question that is in the scope of property tax which is based on asset value not CGT which is based on asset increase.
New politics is all about taxing the existing roof to put a new roof over another family looks like all parties have signed up to it.this will happen over time,No investment is ever as productive, nor as beneficial to society, as the one that puts a roof over the heads of one's family.
No investment is ever as productive, nor as beneficial to society, as the one that puts a roof over the heads of one's family.
I'm really not sure what that has to do with capping an exemption from a relief on CGT arising on the sale of a residential property. In any event, I would have thought that encouraging investment in productive enterprises that give citizens the means to feed and shelter their families was more important than continuing the current uncapped CGT exemption.
(a) Yes, an increase in the value of a property could give rise to an increased LPT liability. What of it?
(b) Here's what I actually said - "...somebody can make a six or seven figure profit on the sale of an asset whose value is partly attributable to public expenditure (roads, policing, etc.) without being required to make any contribution to the exchequer". Can you tell me exactly what is incorrect about that statement? I didn't say that person would never have made any contribution to the exchequer in the past.
(c) Again, I didn't say anything about an increase in value of an asset due to public expenditure. I would have thought it was self-evident that the value of a property is partly attributable to services paid out of the public purse.
In any event, I would have thought that encouraging investment in productive enterprises that give citizens the means to feed and shelter their families was more important than continuing the current uncapped CGT exemption.
(a)+(b) You are paying contributions to the exchequer via property tax related to the notional increase in the value of the asset .. You are paying contributions to the exchequer relating to the maintaining the value of said asset. And now you have to pay for the same services again if you attempt to sell same asset? It's a great scam, taxing three times for the same thing. How many times do we have to pay for the same services???
(c) Circular logic. You are already paying contributions to the public purse to fund those services and your contribution is related to the value of your asset. Either the liability is related to the value of the asset or it is related to the gain in the value of the asset? You want to claim CGT because of an increase in the value of the asset, using reference to the actual value as justification. How many times do you want to make a claim against the same asset for the same service?
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.
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.
If you make the argument that we should remove CGT exemption
I really don't understand why you insist on continually misrepresenting my comments. I didn't argue for the removal of the current exemption from CGT on the sale of a PPR. I simply expressed the opinion that I think it would reasonable to cap the current exemption.
I don't believe that invoking the ridiculously low US thresholds smacks of reasonableness, or that a €211k threshold would see very few people affected.
That's not entirely true; the unrealised gain will be subject to LPT and then the realised gain would attract CGT.
I didn't pick up on the difference between the active "arguing for the removal" versus the passive "reasonable to do so"... Sorry - I should have spotted that sooner.
I do not believe it would be politically possible (or desirable) to cap the exemption at a level that would impact the vast, vast majority of homeowners.
The US home sales exemption was framed back in 1997 - I'm sure the caps will be raised at some point. I would have no problem capping the exemption at a gain of €500k per person - I'm not hung up on a particular figure. It's really the principle that somebody can realise an enormous tax-free profit on the disposal of their PPR that I'm questioning.
Huh? I said that any gain arising on the disposal of a PPR would never have been previously taxed (or exempted from taxation) - that is entirely true.
How it entirely true?!
I buy a place for €800k...it increases in value to €1m. I pay LPT on the €200k uplift every year and then the suggestion is that I pay CGT on the €200k when I sell it.
How it entirely true?!
Not in the scenario you quoted? You'd need to sell it for in excess of €1.3m (without any enhancement)...
I hope you are right that it would not be politically possible... I am more nervous about this possibility coming to pass and I hope to be wrong about that eventuality. I'm not sure if I'm being unduly pessimistic or if you are being optimistic! ... I guess that's Ireland for you and these hodge-podge governments
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