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Capital gains tax on property

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I think ideas like this come from some misguided humanistic / socialist premise that if you drag some achievers down you somehow automatically raise others lower down the socioeconomic scale up. Two unargueable facts; i) homeownership is a bit of a 'sacred cow' in Australia ( no offense intended) ii) the ALP would rather be in power than in opposition. I think these 2 facts will limit some of the 'academic' ideas being put foward by the current tax review. That said, sensible / reasonable reform of taxation to ensure our country is able to fund itself is wise. I can still remember in 1976 my first paypacket as a commercial diver for a week. $814.00 gross $414.00 tax taken out. Things have improved a bit since then:2twocents
 
How ridiculous!

Communism here we come!

What is the point in trying to make money these days?! :banghead:

Successful people who work hard and make money get punished while dole bludgers and lazy fools who cant be bothered live happily for free off all of us!

I'm moving to the Cayman Islands!
 
pointr said:
That said, sensible / reasonable reform of taxation to ensure our country is able to fund itself is wise. I can still remember in 1976 my first paypacket as a commercial diver for a week. $814.00 gross $414.00 tax taken out. Things have improved a bit since then:2twocents
Click to expand...

Nope, still of the mind that less government, less tax, is the road to prosperity. More taxes means socialism and dependence although this is great if your a slouch & expect handouts.

The current talk is all about bailing out the States who have mismanage their financial affairs for years. I've seen one idea to allow the States to gather their own income tax! The mind boggles!

Cheers
 
Buckeroo said:
I've seen one idea to allow the States to gather their own income tax! The mind boggles!

Cheers
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Legally they can, and they used to up until 1942 when income tax collection was taken over by the Commonwealth.

Up until 1942 both state and federal govts collected the tax, but it was more efficient to have one collector, the federal govt, which still collects the revenue and distributes it to the states.

The law for state collection of income tax is still valid, it was never repealed. All they have to do is start charging the tax, they can do it whenever they want to.

Although it would have to be with bipartisan support or the incumbent govt would never get re-elected.

P.S. I read that the CGT on PPOR would also allow tax deductibility of interest while you have a loan over the property.
 
well thats what the GST is for - funding the states.

but when the govt saw how much extra money the GST was bringing in they said "ahhhh yeah, sorry guys... the cheque is in the mail"

get rid of the states all together. give more power to the local govts and let the fed control them all... thats the only way it will work.

our population is the same size as california, our economy is smaller yet for some reason we need state govt?????

i get the "distance" issue... but that's no longer applicable these days!
 
swm79 said:
well thats what the GST is for - funding the states.

but when the govt saw how much extra money the GST was bringing in they said "ahhhh yeah, sorry guys... the cheque is in the mail"
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The Federal govt has been funding the states since Federation.

The distribution of GST revenue to the states was a reallocation of revenue other than income tax revenue.

The federal govt has withheld some GST revenue because some of the states went back on their word when the GST was introduced. They agreed to abolish a range of duties and levies in exchange for the GST revenue, but did not do so. That is why the federal treasury has tight purse strings.

The GST was not a revenue raising exercise - it was designed to replace inefficient and outdated systems.
 
Krusty the Klown said:
Legally they can, and they used to up until 1942 when income tax collection was taken over by the Commonwealth.

Up until 1942 both state and federal govts collected the tax, but it was more efficient to have one collector, the federal govt, which still collects the revenue and distributes it to the states.

The law for state collection of income tax is still valid, it was never repealed. All they have to do is start charging the tax, they can do it whenever they want to.

Although it would have to be with bipartisan support or the incumbent govt would never get re-elected.

P.S. I read that the CGT on PPOR would also allow tax deductibility of interest while you have a loan over the property.
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Mmmm interesting, didn't know about some of the history - cheers

And if there is tax deductions of your own home, great, I will be down to the bank tomorrow to get the biggest loan I can afford!! Would you still call this negative gearing or maybe positive gearing?

Cheers
 
Ok .. let's say this thing actually grows wings and flies. Govt of the day introduces CGT on PPOR. My strategy would be to register my home as a "church" and therefore I do not have to pay ANY taxes. Some of the money I would not be paying in tax:- These include exemptions from the GST, income tax, fringe benefits tax at the federal level; land tax, stamp duty, payroll tax and car registration (state); and rates, and some power and water charges (local government and utilities). Amen to that brothers ! :eek:
 
trainspotter said:
Ok .. let's say this thing actually grows wings and flies. Govt of the day introduces CGT on PPOR. My strategy would be to register my home as a "church" and therefore I do not have to pay ANY taxes. Some of the money I would not be paying in tax:- These include exemptions from the GST, income tax, fringe benefits tax at the federal level; land tax, stamp duty, payroll tax and car registration (state); and rates, and some power and water charges (local government and utilities). Amen to that brothers ! :eek:
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I still like the idea of getting tax deductions and at the same time buy the house next door & turn it into a brothel. What CGT?

Cheers
 
We could form a partnership and call our church/brothel "The sisters of screaming mercy" for all the S&M fans out there.
 
I know deductibility of home loan interest is in place in the US, not sure about the CGT on disposal though.
 
Krusty the Klown said:
The Federal govt has been funding the states since Federation.

The distribution of GST revenue to the states was a reallocation of revenue other than income tax revenue.

The federal govt has withheld some GST revenue because some of the states went back on their word when the GST was introduced. They agreed to abolish a range of duties and levies in exchange for the GST revenue, but did not do so. That is why the federal treasury has tight purse strings.

The GST was not a revenue raising exercise - it was designed to replace inefficient and outdated systems.
Click to expand...

ipso facto "the cheque is in the mail"

i was talking in generalities for the lay - BBus, MTax, CPA, T.A. here
 
Krusty the Klown said:
Is that CGT on ALL asset disposals? Or just family homes?
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i believe there is a threshold level before you start to pay (on your family home) and you have to be living at the residence for 2 of the 5 years before the sale.

friend of mine sold their property in Florida last year - only way i know - JUST scraped in to the 2 years out of the last 5!
 
but CGT didnt apply then anyway... just rememebr him going through all the precautionary details
 
There would have to be some sort of similar phase in process here.

Thresholds etc.

The article I read stated that CGT and deductibility of interest went hand in hand in the proposal to the Henry review.

If this was the case then there would surely be exemptions for people who own outright with no debts etc, maybe no tax if you own for 20 years or something - like the no CGT on assets purchased before 1985 rule.

When you start to look at it that way the proposal does not sound that outlandish.

Implement the tax but give electors a tax break, it could be a way of softening the blow but still increasing tax revenue.

And an incentive for people to own instead of rent.
 

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