The other drawback is the position of a family who have moved in with a parent. When the parent dies they may well have to sell up. That could be avoided if the same rules that are currently in place for inheritance are applied.But did they make the lot of money from buying and selling? They made the money from owning property.
One big drawback of the proposal is that it might discourage people from trading up or down. And in a healthy market, people should trade up and down.
Brendan
In the US, if you realise a capital gain on the sale of your main home, you can only exclude $250,000 of that gain (or $500,000 if married and filing jointly) for tax purposes. This exemption is only available once every two years.
When the parent dies they may well have to sell up. That could be avoided if the same rules that are currently in place for inheritance are applied.
In my anecdotal experience people rarely crystallise these gains, staying in overly large properties until death.Are you fully opposed to CGT on the PPR? On all PPRs? Even homes worth over €2m?
I am thinking about the millenial generation, people under 40.
In general these people cant get on the property ladder.
We all know the reasons why.
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.
In every instance the property increased very substantially in value. To me, they made the money by buying and selling, and one could say, by also owning the property.But did they make the lot of money from buying and selling? They made the money from owning property.
One big drawback of the proposal is that it might discourage people from trading up or down. And in a healthy market, people should trade up and down.
Brendan
Just talking about CGT on disposal at death....why is charity not allowed start at home, and the person leaving the house decide fully on the distribution of funds to the next generation?Hi fisto
My intention is to help these people get on the housing ladder!
Good point, also a very important one.Just talking about CGT on disposal at death....why is charity not allowed start at home, and the person leaving the house decide fully on the distribution of funds to the next generation?
We are going too far with removing personal decision making if this were to change.
I understand that, but domestic property is unique. Purchasing a domestic property entails the purchase of (a) a service, i.e. the provision of shelter and (b) a fixed asset i.e. the walls, roof, foundations, etc. In practical terms these are indivisible. You can’t efficiently separate out the what the family has paid for its family-specific shelter needs from any increase in value of the fixed asset component.Hi PMU
I am proposing to tax the gains from selling a house. I would like to see people paying tax on their gains rather than as at the moment, ordinary people paying Local Property Tax on on ongoing basis.
Brendan
As properties tend to increase in value in tandem, you’ve no real gain when you sell when your shelter needs change as any gain will be swallowed up due to property price inflation. It’s unreasonable to tax such interim gains.
Hi BrendanThat is easily dealt with by having roll-over relief. The CGT is refundable if the person buys another house. So, for most people, the CGT liability will hit on death.
Brendan
Hi Brendan
How you do propose quantifying historic enhancement expenditure in relation to a PPR CGT case post-death? And also for self-builds?
And if they bought it 30, 40 or 50 years ago, Brendan? Comparatively few people die within 20 years of buying their home.How would I deal with property valuation for Local Property Tax? Self-assessment which is not perfect, but works generally.
One of the arguments against charging CGT on shares on death is that it would be difficult to establish the base cost. That should not stop an otherwise good policy.
Likewise, if I had to work out the base cost for someone dying today who bought their house 20 years ago, I could do a good stab at it.
They'd still be entitled to enhancement expenditure relief even if the added kitchen had been demolished in the meantime.If they added a kitchen 10 years ago, it's probably not reflected in the value today.
It would be a huge issue for the next 50 to 60 years. There are young people currently not long settled down in their new homes who will die in old age while still living there.Not an issue going forward. Can be reported in real time (say within 2 years of completion) and invoice can be uploaded to revenue directly for automatic calculation when the time comes.
If you are offering 100% enduring roll-over relief you might as well not charge CGT at all, as all you are doing is introducing additional bureaucratic friction in housing transactions. It’s also unreasonable to refund CGT where a person buys another family home but to charge it without refund where someone of necessity cannot buy another property because they must enter a care home or otherwise rent sheltered accommodation.That is easily dealt with by having roll-over relief. The CGT is refundable if the person buys another house.
Brendan
But there is no CGT liability on shares transferred on death. Why introduce one on property?So, for most people, the CGT liability will hit on death.
Brendan
The solution here lies more in introducing spending limits on local authorities; the elimination of vanity projects; strict control of project costs, etc.Hi PMU
I am proposing to tax the gains from selling a house. I would like to see people paying tax on their gains rather than as at the moment, ordinary people paying Local Property Tax on on ongoing basis.
Brendan
But there is no CGT liability on shares transferred on death. Why introduce one on property?
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