We have a growing population. If we completely stopped immigration then yeah supply wouldn’t be a problem because our birth rate is below replacement rate.
Edit: for the record I do not think we should stop immigration!
It’s really just negative gearing innit.
It’s crack to aspirational people. The party that would get rid of it lost and unloseable election over it, so here we are.
and the CGT discount
At some point the proportion of voters it harms will outweigh the proportion it helps, ad it’ll be reset and that’s going to happen quicker than most people expect.
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Not to contradict the issues with homes as retirement funding, but We’re also changing our relationship to land / property size. We used to have small, full houses and big yards on average.
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For main residence?
That one I kinda get.
Negative gearing only benefits investors and patently distorts the market. It’s a trash policy.
If it’s your main residence why would people be worried about CGT? It’s a once off thing when selling. It’s the primary driver for the buy and flip crowd. They dont care about negative gearing because they dont have tenants, it’s all buy and hold it for a few years and then sell. They offer absolute nothing to the economy or society yet they get this massive tax break.
Because people move? Because ostensibly you want older folks to downsize?
If you wack these guys with a potentially massive tax when they do, they’ll figure they might as wait till they die and pass it on for free.
If youre trying to sting people for moving house, the average tax bill is going to be, what, 300k? That’s pretty harsh imo.
I’m considering a move interstate at the moment. If I knew I’d have to pay top line tax rates on the sale of my house it would change the equation quite a bit. I’d probably consider keeping it and renting it out…
Bring back death taxes!
I mean, I’m with you. But good fucking luck.
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CGT doesn’t apply to primary residences.
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The Greens are openly betting on this
The pension assets test is a factor too - if you downsize from a family home to a unit, the capital gain affects your pension eligibility. This creates a stickiness in the market.
Similarly, stamp duties and other costs of moving create stickiness that prevents people from hopping properties when it suits.
Yeah, that’s 100% true, and arguably they’re already winning on it in Brisbane where they now hold 3 lower house seats.
Yep. That’s the exemption we’re discussing.
It’s a tax on gains. It’s not stealing money from peoples pockets.
People get taxed on their earnings. Why should someone selling a house who’s making money off it get tax breaks?
Solution to the other end is inheritance tax.
Hey, it just means people have to be nice to their kids and transfer them the assets and hope they were nice enough!
That’s the beauty of a death tax. You can get em with that stamp duty and or CGT - or hit em when they’re in the ground.
Either way, the tax man gets his.
I think a death tax is on the cards in the next 10 years or so. We’ll get out chance before too long.
It would have to be a massive gain to pay 300k.
Here is an example of someone who’s sold for 500k profit - earning 100k a year. 25k purchase/selling costs.
96k. They still walk away with 400k+ over and above what they purchased the place for.
That’s now. So we’re looking at approx 200k. Still walking away with 300k over and above.
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Yeah my bad on the maths. We bought our place for around 450k 10 years ago. It’s probably worth 1 mil now. That’s a gain of 550k. I’d be up for around 38-42% on that, knowing my tax position. So 209k tax? Ouch?
Point is, it an exemption thats helping who you want, compared to negative gearing.
Dude moving house? I’ll let that behaviour slide ( in fact we need to encourage it in some cases).
Dude claiming a deduction for a loss on an investment property - not sure I’m so sympathetic.