Value Collector
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In the USA you get to claim tax deductions for the family home, I don’t believe they tax the capital gains.
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There is a lot of sorting two birds with one stone in taxing the family home, it focuses mainly on high wealth individuals and it pops the Sydney/ Melbourne ponzi, with out too much effect on he rest of the country.
Also once it is a taxable item, it becomes an assessable item for the pension, there is a lot of upside for the Govt, also with Albo riding the wave it is a good time to introduce it, does raise some possibilities especially if they make it effective above a pre determined value.
Value Collector
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It would would probably bring in negative cashflows for the government, because if they decided to tax capital gains on the family home, then they would have to allow deductions eg loan interest, maintenance, insurance, capital expenditures on things like pools etc
Suddenly we all have a huge list of personal expenses that can now be used to offset tax, basically letting us negative gear the family home.
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There was no mention of the above, when they were going to only allow negative gearing on new build homes, same as many rules and taxes that are introduced aren't applied to politicians.
No one said it has to be fair, they write it any way they see fit.
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It'd be like "the recession we had to have".
It would still be coming up 25 years later as a reason to not vote for whichever party did it.
Value Collector
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Different situation.There was no mention of the above, when they were going to only allow negative gearing on new build homes, same as many rules and taxes that are introduced aren't applied to politicians.
No one said it has to be fair, they write it any way they see fit.
It makes sense that if they wish to tax a capital gain when a family sells their home, they have to allow as a minimum for all the expenses that contributed to that capital gain, Eg if I buy a house for $100K and spend $50K renovating it sell it for $150K, they can't justify taxing that $50K its not a genuine capital gain, it was just the $50k I renovating it being reflected in the new price, insuring that property and interest payments should all be deductible too, because they contribute to the capital gain.
So, once they start taxing peoples personal homes, then all sorts of renovations and additions become tax deductible.
Value Collector
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Labour got a bloody nose when they wanted to ban franking credit refunds, and barely anyone understands franking credits.
But everyone will understand having to hand over $100K in tax just because they wanted to move across the city, especially when they realise they can't afford a house of equal value to the one they sold, because they government took their pound of flesh, the hate for that political party will become multi generational when the kids realise they have to share a bedroom because of a government taxed their parents for wanting to move.
it would become known as the moving tax, each time a family moves they have to down size to pay a tax, where renters don't.
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Depends on if they set a base value where CGT applies.
say $5 million would be in the 'luxury home' bracket in a lot of areas. They may or may not allow deductions depending on how generous they feel.
But I doubt very much if the Labor government would do that. They are still running scared of the idea that their negative gearing proposals cost them the 2019 election, and the bruises haven't healed yet.
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I don't think it will happen either, more likely an inheritance tax if anything, but as you say anything radical is highly unlikely.
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Never underestimate the perfidy or stupidity of politicians.
Mick
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Luxury homes over $5 Million are going to have a larger proportion of their capital value tied up in the building, fixtures and fittings rather than land content compared to the average family home, and all those are depreciating assets that would have to be written off against any capital gain. Seems like a great way for the wealthy to accumulate tax losses on personal spending that they can write off against other investment capital gains. At the end of the day the government earn GST and stamp duty when we build and renovate our personal homes, its best just to leave it at that.Depends on if they set a base value where CGT applies.
say $5 million would be in the 'luxury home' bracket in a lot of areas. They may or may not allow deductions depending on how generous they feel.
But I doubt very much if the Labor government would do that. They are still running scared of the idea that their negative gearing proposals cost them the 2019 election, and the bruises haven't healed yet.
It would be a very messy tax to bring in, its basically the reason the government allows us to keep earnings from home solar systems tax free, because if they tried to tax the out put of solar panels, they would have to allow us to claim the capital costs back. It's easy for them to just avoid ignore any gains made on personal items, so then they don't open themselves up to hoards of deductions coming in.
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worth a claim if they bring it in ( capital gains tax on the family home )
could be a bonanza for tax lawyers ( either win or lose on the court challenges over legitimate claims )
over9k
So I didn't tell my wife, but I...
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"The most it will be is a pause, they're still going to continue hiking from july onwards".
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The next election would see them never to be seen again I would think, only die-hard one-eyed believers would be their supporters.
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Everything is generational, the older generation grew through a period where most aspired to own their own home, so they hold the tax free family sacred.
The next couple of generations might have a different take, if the price becomes un surmountable and they make up the majority of voters.
Once the media people start to feel the pinch, the narrative changes and with it the political motivation.
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But Mr sp would any of the pollies have the balls to tread down that path no matter what generations are the most.
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I don't get this. Why pause. JPowell has always communicated that they'd continue until they got the job done. Inflation is still high....
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The pollies do what is required to get in the big chair, the 2019 election proved that, they jettisoned all their policies.
The big issue will be inflation, especially on Sydney/ Melbourne house prices, the information I posted on post covid immigration shows most of the migrants are heading to to those two cities.
So the prices there are going to keep inflating and 5% on $1.5m isn't going to be covered by 5% pay rise, eventually something gives, what that is remains to be seen.
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People have to adjust to the squeeze, to hard for too long gives a lot of unintended consequences, most very ugly.
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Ouch
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