$2m Home Tax - What's next?

[stocksontheblock]

Well, as per The Australian this morning (Sat 15/8/09) we can possibly expect to see a capital gains tax applied to all homes over the value of $2million.

Disclaimer: I dont have a house worth more than $2million - sadly.

Now, doesnt this seem like yet another Labor Party - if it is adopted - grab to make the so called 'rich' the whipping boy for the apparent poor Labor Party supporters?

I guess the one thing that really makes me quite angry about this is the comments from the 'accountants' and 'tax experts' that the Australian home is the biggest tax haven - code for rort - and so should be treated in a manner so as to collect a 'fair' share of tax.

Now, correct me if I am wrong, yet I have never brought any of the homes I have had, nor has anyone I know, purchased their home because it was an effective means of reducing their tax. They PURCHASED the home because they wanted a place to live it, and if so desired, raise a family in.

So ... what do you all think? Is this something that is fair?

 

[Mofra]

Re: $2m Home Tax - Whats next?

Krudd needs to find a way to pay for his splurges (the direct hand-out, the indirect hand-out, NBN that is a looming disaster).

I'm wondering if this $2m figure will be indexed to an inflation measure or will we see this tax apply in decades when $2m homes are far more common?

 

[drsmith]

Re: $2m Home Tax - Whats next?

I'm wondering if this $2m figure will be indexed to an inflation measure or will we see this tax apply in decades when $2m homes are far more common?

If this goes ahead then then I would give indexation of the $2m threshold about as much chance as the indexation of income tax brackets.

Several years ago the then WA state ALP government proposed something similar but in a far cruder form. Their plan was to levy a premium property tax of 2% on residential properties valued at $1m+ payable annually. When it was realised there would be cases of Mr & Ms Pensioner being forced to sell their family home of many decades, the plan was modified so that in those cases the tax woud acculumate and be payable out of their estate upon death.

No prizes for guessing what that got called. The premium property tax idea was subsequently scrapped.

 

[trainspotter]

Re: $2m Home Tax - Whats next?

Strangling the goose that lays the golden eggs immediately springs to mind. Socialiasm is alive and well ... eat the rich.

 

[Buckeroo]

Re: $2m Home Tax - Whats next?

Krudd needs to find a way to pay for his splurges (the direct hand-out, the indirect hand-out, NBN that is a looming disaster).

I'm wondering if this $2m figure will be indexed to an inflation measure or will we see this tax apply in decades when $2m homes are far more common?

One thought is to calculate the capital rise on a yearly basis (similar to rates) & you pay capital gains tax annually. It may start at $2M but in coming years I'm sure it would be widened to lower valued housing.

How about this scenario:
If your house dropped in value, say 40%, in one year, then in the next it started rising again, would have to pay a second time for the same capital increase? The mind boggles.

Cheers

 

[Buckeroo]

Re: $2m Home Tax - Whats next?

Strangling the goose that lays the golden eggs immediately springs to mind. Socialiasm is alive and well ... eat the rich.

Yeah they are going down the right track for socialism....if you have a government providing all the jobs, food & clothing, why the hell would you need rich people.

Cheers

 

[trainspotter]

Re: $2m Home Tax - Whats next?

Yeah they are going down the right track for socialism....if you have a government providing all the jobs, food & clothing, why the hell would you need rich people.

Cheers

Ummmmmmm ... to pay the tax to keep the welfare handouts flowing? To employ people to pay the tax to keep the welfare handouts flowing? Margaret Thatcher summed it up beautifully "The problem with socialist governments is that they soon run out of other peoples money to spend" LMFAO

It appears that the Government is forming "policy on the run" to stem the black hole of fiscal responsibility they have created. I know of a little boy in Holland who is fond of putting his finger in dykes. Perhaps I should give him a call before the dam bursts and the tax pain really begins to hurt?

 

[tech/a]

Re: $2m Home Tax - Whats next?

Damn.
It will be the Bloody Leah Jet next!

 

[Uncle Barry]

Re: $2m Home Tax - Whats next?

Yeah they are going down the right track for socialism....if you have a government providing all the jobs, food & clothing, why the hell would you need rich people.

Cheers

Good afternoon.
Whats next,
DEATH DUTY !
Because you need money to buy votes from the bl.....ers, and taking money from the called rich is the quickest way !

down the right track for socialism....
WRONG !
this is the path of COMMUNISM !

The difference between the two is,
one, the people are tricked at the polling booth and
the other comes via the gun

BUT
if you remove as many guns as possible from the general public, the Gov of the day can do ANYTHING IT LIKES !

Kind regards, Australia, you will need all the luck you can muster shortly with the commies in power !
UB

 

[stocksontheblock]

Re: $2m Home Tax - Whats next?

How about this scenario:
If your house dropped in value, say 40%, in one year, then in the next it started rising again, would have to pay a second time for the same capital increase? The mind boggles.

Cheers

Great point!!! Yet its never stopped the government taxing people twice for the same thing ... so this would just become what they euphemistically call 'unfortunate'.

 

[trainspotter]

Re: $2m Home Tax - Whats next?

Double dipping is what governments do best. Rmember the GST promise of NO STAMP DUTY? Paid your insurance lately? Bought a vacant block of land and constructed a house lately? Classic examples. Both are there for the Guvmt to plunder.

 

[stocksontheblock]

Re: $2m Home Tax - Whats next?

After reading more and more on this what I also find very odd is that the 'egg-heads' who have come up with this wonderful idea - just for the egg-heads, that is written with LOTS of sarcasm - is that if you apply this because, as has been suggested the rich get, $1 for $1 a better deal (with no capital gains applied), then naturally it would only be the rich who could also off-set the interest, repairs, capital repairs etc on the 'family' home, and so would be able to off-set more against their income and hence reduce their tax bill, so would this not become a self-fulfilling circle of:

1. tax every $ that the home is over $2m
2. use interest paid as a deduction
3. pay less tax
4. money paid on capital gains is lost against revenue lost on lower tax paid

And ... if you can afford a house of this sort of value then it would be in your interests to borrow more to pay more in interest to have more to write off against your income ... so all in all, to catch the apparent 'rich' with their wealthy homes and tax havens, you actually given them an even bigger tax break.

 

[drsmith]

Re: $2m Home Tax - Whats next?

IIRC, GST replaced the federal wholesale sales tax system although excise remained on the three old favourites, fuel, alcohol and cigarettes.

Sales taxes, stamp duties etc are typically levied by state governments so the way to get rid of those taxes is obvious.

 

[trainspotter]

Re: $2m Home Tax - Whats next?

IIRC, GST replaced the federal wholesale sales tax system although excise remained on the three old favourites, fuel, alcohol and cigarettes.

Sales taxes, stamp duties etc are typically levied by state governments so the way to get rid of those taxes is obvious.

Building products had a sales tax on them that was removed and a 10% Federal GST was overlaid. Did construction costs come down? NUP ... labour quantity of building contract added the 10% PLUS the builder added a further 10% on his bottom line. Oh dear.

But you are right Dr Smith. Sales tax is the responsibility of the State Department of Revenue. Wine Equalisation Tax was another favourite of mine. LOL. A WET Tax for wine. How ironic.

 

[prawn_86]

Re: $2m Home Tax - Whats next?

Dont homeowners already pay rates and body corporate fees?? Another incentive to rent... Although it will push rents up too if it happens i guess (only high end 'executive' rents)

 

[gfresh]

Re: $2m Home Tax - Whats next?

Seems silly idea to me, and will simply introduce further distortions, of which there are already many. All it will do is encourage wealthy owners to never sell their property .. collect the yearly deductions, and simply invest gains or the deductions into further properties.

If this were to be expanded to the general market, what a mess.. nobody would ever sell their properties, they'd simply keep their existing and buy another to avoid the CG, not really a great solution to the supply problem.

 

[badger41]

Re: $2m Home Tax - Whats next?

Whats next,
DEATH DUTY

It's here already, Uncle Barry.

It's the 15% of capital that you'll pay when you have no "dependents" to leave your superannuation to (and chances are your only remaining dependent is your spouse, if you have one. Adult kids don't count, and when spouse dies...). Half a million in super? There goes $75K!

Never mind, just keep paying the fees to run your SMSF, or to your financial adviser, fund manager etc to "manage" your superannuation.

Not financial advice, but right now over '60's can cash in super tax and fee free. A window of opportunity?

Cheers, badger.

 

[So_Cynical]

Re: $2m Home Tax - Whats next?

Yet another ALP/Rudd bashing thread bring on the double dissolution i say.

If i had a 2 million dollar house i wouldn't be complaining about any new taxes, and genuinely struggle to understand how anyone potentially suffering from this new proposed tax could or would have a problem with it.

Have money = pay tax

 

[trainspotter]

Re: $2m Home Tax - Whats next?

Yet another ALP/Rudd bashing thread bring on the double dissolution i say.

If i had a 2 million dollar house i wouldn't be complaining about any new taxes, and genuinely struggle to understand how anyone potentially suffering from this new proposed tax could or would have a problem with it.

Have money = pay tax

Spoken like a true socialist. Let's say I worked hard in the fifties (1957) and purchased a property in an outer suburbs close to the beach. It was not much back then, fibro 3 bedroom home sitting on 1000sqm and a thunderbox out the back. I retired in 1987 and continued to live in my own piece of Australiana and decided to upgrade my sh!tbox and place internal plumbing inside so the Missus did not have to wander around in the backyard looking for the crapper. I am now 82 and living on the pension and my house is valued at over 2 million and I am on the pension.

Above is a basic outline of the possibilties of what can and does happen in the real world. The state govt tried the same thing in WA. Massive voter backlash. Oh well ........ there will be plenty more "rich people" to thieve from in the way of taxes in the future. NOT !

 

[Garpal Gumnut]

Re: $2m Home Tax - Whats next?

Spoken like a true socialist. Let's say I worked hard in the fifties (1957) and purchased a property in an outer suburbs close to the beach. It was not much back then, fibro 3 bedroom home sitting on 1000sqm and a thunderbox out the back. I retired in 1987 and continued to live in my own piece of Australiana and decided to upgrade my sh!tbox and place internal plumbing inside so the Missus did not have to wander around in the backyard looking for the crapper. I am now 82 and living on the pension and my house is valued at over 2 million and I am on the pension.

Above is a basic outline of the possibilties of what can and does happen in the real world. The state govt tried the same thing in WA. Massive voter backlash. Oh well ........ there will be plenty more "rich people" to thieve from in the way of taxes in the future. NOT !

Your example is extremely rare.

Mostly folk with houses worth more than $10 mill have gained them through either luck, inheritance or crime.

I am all in favour of these big houses being taxed to buggery.

gg