# Irish Times "CGT exemption on family home at risk in the Budget"



## Brendan Burgess (2 Aug 2017)

*Prospect of capital gains tax on family home raised*
* Move is among tax reform options put forward by Department of Finance group*
_
Among the options outlined are allowing relief only for homes up to a certain market value, or allowing relief on gains up to a certain cash limit with tax being imposed on any sum above that amount.


The officials also raise the possibility of introducing a new lower rate of capital gains tax that would apply only to gains made on the sale of the family home._


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## Laramie (2 Aug 2017)

Well I will be out on the streets to protest about this one.


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## Gordon Gekko (2 Aug 2017)

Hi Brendan,

I read the Tax Strategy Group report last night. Frankly, it's a shambles. Classic "Yes, Minister" stuff ("on the one hand, on the other hand...). 

"With regard to the rate, it could be increased or decreased"

Well that's very insightful!

This is a non-story.

Gordon


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## torblednam (2 Aug 2017)

I'm a homeowner (and I'm clean shaven) and I don't see a problem with this as a progressive measure if implemented properly.

For example:
1. Either an exemption or a rollover relief for people trading up.
2. Some sort of indexation relief applied to the PPR, to allow for a reasonable amount of inflation.


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## rob oyle (2 Aug 2017)

This is kite flying ahead of the budget, it'll get dropped and all of the FG backbenchers (and maybe the FF ones too?) can go back to their constituents and tell them how they stopped those meanies in the Department from taxing homes.

A victory for the homeowner when in reality, nothing has changed.


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## IsleOfMan (2 Aug 2017)

It could also be seen as a tax on downsizing. 

The older couple who purchased 20 years ago in Ballsbridge. Value of home has increased over the 20 years. The family has flown. They don't need the larger house so want to move to a smaller house. The Government take advantage of their situation.


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## Sarenco (2 Aug 2017)

The home sales exemption from CGT is capped at $250k ($500k for a couple) in the US. 

I would have thought that it would be perfectly reasonable to introduce a similar cap here.  It never made a lot of sense to me that somebody could make massive untaxed profits on the sale of their PPR.


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## T McGibney (2 Aug 2017)

Irish people are hilarious. We have a housing crisis. Let's tax housing!


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## mtk (2 Aug 2017)

Gordon Gekko said:


> Hi Brendan,
> 
> I read the Tax Strategy Group report last night. Frankly, it's a shambles. Classic "Yes, Minister" stuff ("on the one hand, on the other hand...).
> 
> ...


 
hope you slept well


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## Gordon Gekko (2 Aug 2017)

Sarenco said:


> The home sales exemption from CGT is capped at $250k ($500k for a couple) in the US.
> 
> I would have thought that it would be perfectly reasonable to introduce a similar cap here.  It never made a lot of sense to me that somebody could make massive untaxed profits on the sale of their PPR.



A country where's there's effectively no inheritance tax up to the $5.5m level...

This would probably lead to further distortion in the market as empty-nesters would be motivated to hold on to their homes until death, at which time any uncrystallised CGT liability is extinguished.

And a cap at the $250k/€212k level would be obscene in the context of house prices here.

As I posted earlier, this isn't even kite-flying, it's an extract from a low quality Yes, Minister style report which tries to summarise every option. This would have people burning effigies in the streets and would see FG and FF out on their ears.

Gordon


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## Brendan Burgess (2 Aug 2017)

Gordon Gekko said:


> This would have people burning effigies in the streets and would see FG and FF out on their ears.



Yes indeed. Wealthy home owners with big unrealised capital gains would vote for People before Profit and Sinn Féin  to protect their interests. 



Brendan


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## Andy836 (2 Aug 2017)

Never going to happen but I like the fact someone has considered it. If it were to be implemented, I don't think there should be any lower threshold - why should those with low value houses be exempted from a gains tax if their house has increased in value?


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## Sarenco (2 Aug 2017)

Gordon Gekko said:


> This would probably lead to further distortion in the market as empty-nesters would be motivated to hold on to their homes until death, at which time any uncrystallised CGT liability is extinguished.



Yeah, I agree that it probably would have a marginal "lock in" effect at the fringes.  On the other hand, it might encourage some people to invest a greater portion of their income in more productive assets, which I think would be beneficial from a societal perspective.



Gordon Gekko said:


> And a cap at the $250k/€212k level would be obscene in the context of house prices here.



Well, that's pretty close to the average residential property price (per the CSO) so I would have thought an exemption from CGT on gains of up to $250k for an individual would still be relatively generous.  Bear in mind that acquisition/disposal and improvement costs should also be deductible.

In any event, the level of any cap is not particularly important.  I just think it's strange that somebody can make a six or seven figure profit on the sale of an asset whose value is partly attributable to public expenditure (roads, policing, etc.) without being required to make any contribution to the exchequer.


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## odyssey06 (2 Aug 2017)

Sarenco said:


> I just think it's strange that somebody can make a six or seven figure profit on the sale of an asset whose value is partly attributable to public expenditure (roads, policing, etc.) without being required to make any contribution to the exchequer.



(a) Property Tax.
(b) Would they not have been paying tax on the goods and services used in the acquisition and maintenance of said property?
(c) Please explain how 'policing' lead to the differential effect in the value of the asset vis a vis all the other properties in this jurisdiction. Would this mean that if the government close a police station in an area, that all the property owners can sue the government for devaluing their asset?


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## jjm (2 Aug 2017)

Andy836 said:


> Never going to happen but I like the fact someone has considered it. If it were to be implemented, I don't think there should be any lower threshold - why should those with low value houses be exempted from a gains tax if their house has increased in value?


FF joined SF and people before profit to do away with water charges They are going down hill since .The FG party for some reason don't want to fill the gap in the market it looks like 60% paid there water charges.They are all promising to spend more money we cannot tax working people any more so new taxes is there only option if they want to spend more,They will bring in new taxes before cutbacks they will be more sneaky stealth taxes i expect they will be going after people with money tax a bit here tax a bit there and keep rising it every year,they are all following Paul Murphy brand of politics.

Just look at USC up to now this was paid mostly by paye people who paid away higher prsi until the USC came in it was then put on unearned income they promised to do away with it looks like USC is not going away  anywhere soon .

It was SF who were pushing for the USC  not to be done away with now all parties hold the SF view, taxing Unearned Income/Wealth more is the new show in town,


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## Sarenco (2 Aug 2017)

odyssey06 said:


> (a) Property Tax.
> (b) Would they not have been paying tax on the goods and services used in the acquisition and maintenance of said property?
> (c) Please explain how 'policing' lead to the differential effect in the value of the asset vis a vis all the other properties in this jurisdiction. Would this mean that if the government close a police station in an area, that all the property owners can sue the government for devaluing their asset?



(a)  The sale of a residential property doesn't crystallise an LPT liability.
(b)  Yes, they would, but what of it?  Again, such expenses should be deductible in calculating any taxable gain.
(c)  I didn't say anything about differential effects.


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## odyssey06 (2 Aug 2017)

Sarenco said:


> (a)  The sale of a residential property doesn't crystallise an LPT liability.
> (b)  Yes, they would, but what of it?  Again, such expenses should be deductible in calculating any taxable gain.
> (c)  I didn't say anything about differential effects.



(a) The increase in the value of a residential property in theory could lead to an LPT liability.
(b) You now accept that they are probably making a contribution to the exchequer?
(c) Please explain how the *increase *in the value of the asset is attributable to public expenditure. You said that the value of the asset is partly attributable to public expenditure but if it is the core value of the asset that is in question that is in the scope of property tax which is based on asset value not CGT which is based on asset increase.


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## T McGibney (2 Aug 2017)

Sarenco said:


> On the other hand, it might encourage some people to invest a greater portion of their income in more productive assets, which I think would be beneficial from a societal perspective.



No investment is ever as productive, nor as beneficial to society, as the one that puts a roof over the heads of one's family.


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## odyssey06 (2 Aug 2017)

In a lot of parts of rural France, you hear the stories of two sale prices... what was actually paid and what was declared as paid - to avoid such taxes as this! Added possible bonus, if you declare a lower value on the property, your property tax would also be lower.

As far as I'm concerned, any new tax introduced without a mandate in a general election does not have the consent of the people, and deserves to be treated as such by the people.


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## Cervelo (2 Aug 2017)

Its the same in rural Spain, You agree a price for the property, then you agree how much will be in cash


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## Sarenco (2 Aug 2017)

odyssey06 said:


> (a) The increase in the value of a residential property in theory could lead to an LPT liability.
> (b) You now accept that they are probably making a contribution to the exchequer?
> (c) Please explain how the *increase *in the value of the asset is attributable to public expenditure. You said that the value of the asset is partly attributable to public expenditure but if it is the core value of the asset that is in question that is in the scope of property tax which is based on asset value not CGT which is based on asset increase.



(a)  Yes, an increase in the value of a property could give rise to an increased LPT liability.  What of it?
(b)  Here's what I actually said -  "...somebody can make a six or seven figure profit on the sale of an asset whose value is partly attributable to public expenditure (roads, policing, etc.) without being required to make any contribution to the exchequer".  Can you tell me exactly what is incorrect about that statement?  I didn't say that person would never have made any contribution to the exchequer in the past.
(c)  Again, I didn't say anything about an increase in value of an asset due to public expenditure.  I would have thought it was self-evident that the value of a property is partly attributable to services paid out of the public purse.


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## jjm (2 Aug 2017)

T McGibney said:


> No investment is ever as productive, nor as beneficial to society, as the one that puts a roof over the heads of one's family.


New politics is all about taxing the existing roof to put a new roof over another family looks like all parties have signed up to it.this will happen over time,


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## Sarenco (2 Aug 2017)

T McGibney said:


> No investment is ever as productive, nor as beneficial to society, as the one that puts a roof over the heads of one's family.



I'm really not sure what that has to do with capping an exemption from a relief on CGT arising on the sale of a residential property. 

In any event, I would have thought that encouraging investment in productive enterprises that give citizens the means to feed and shelter their families was more important than continuing the current uncapped CGT exemption.


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## odyssey06 (2 Aug 2017)

Sarenco said:


> I'm really not sure what that has to do with capping an exemption from a relief on CGT arising on the sale of a residential property. In any event, I would have thought that encouraging investment in productive enterprises that give citizens the means to feed and shelter their families was more important than continuing the current uncapped CGT exemption.



I must have missed the part where the increase of this CGT was balanced by any incentive to divert money into productive enterprises? The government already taxes the hell out of those productive enterprises. It has just found something new it thinks it can get away with taxing the hell out of it.
If the government wants to encourage investment in productive enterprises, it should try actually encouraging investment in productive enterprises, and concentrate on laying the foundations for enterprises to be productive.

One of the reasons people look to their homes as a form of retirement planning is because the government through taxation has made alternative investments (with the exception of marginal relief on pensions) so unappealing.


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## odyssey06 (2 Aug 2017)

Sarenco said:


> (a)  Yes, an increase in the value of a property could give rise to an increased LPT liability.  What of it?
> (b)  Here's what I actually said -  "...somebody can make a six or seven figure profit on the sale of an asset whose value is partly attributable to public expenditure (roads, policing, etc.) without being required to make any contribution to the exchequer".  Can you tell me exactly what is incorrect about that statement?  I didn't say that person would never have made any contribution to the exchequer in the past.
> (c)  Again, I didn't say anything about an increase in value of an asset due to public expenditure.  I would have thought it was self-evident that the value of a property is partly attributable to services paid out of the public purse.



(a)+(b) You are paying contributions to the exchequer via property tax related to the notional increase in the value of the asset .. You are paying contributions to the exchequer relating to the maintaining the value of said asset. And now you have to pay for the same services again if you attempt to sell same asset? It's a great scam, taxing three times for the same thing. How many times do we have to pay for the same services???
(c) Circular logic. You are already paying contributions to the public purse to fund those services and your contribution is related to the value of your asset. Either the liability is related to the value of the asset or it is related to the gain in the value of the asset? You want to claim CGT because of an increase in the value of the asset, using reference to the actual value as justification. How many times do you want to make a claim against the same asset for the same service?


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## T McGibney (2 Aug 2017)

Sarenco said:


> In any event, I would have thought that encouraging investment in productive enterprises that give citizens the means to feed and shelter their families was more important than continuing the current uncapped CGT exemption.



There we disagree. Most investment in third-party productive enterprises is wasted anyway, hence the old "family, friends and fools" saw.


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## Sarenco (2 Aug 2017)

odyssey06 said:


> (a)+(b) You are paying contributions to the exchequer via property tax related to the notional increase in the value of the asset .. You are paying contributions to the exchequer relating to the maintaining the value of said asset. And now you have to pay for the same services again if you attempt to sell same asset? It's a great scam, taxing three times for the same thing. How many times do we have to pay for the same services???
> (c) Circular logic. You are already paying contributions to the public purse to fund those services and your contribution is related to the value of your asset. Either the liability is related to the value of the asset or it is related to the gain in the value of the asset? You want to claim CGT because of an increase in the value of the asset, using reference to the actual value as justification. How many times do you want to make a claim against the same asset for the same service?



Can we please be clear about what we are talking about before you attack any more straw men?

I originally said that I thought it would be reasonable if we capped the current exemption from CGT on the sale of a PPR in a similar manner to the position in the US.  That would have zero impact on the vast, vast majority of homeowners.  It would only impact homeowners that realise a very substantial profit on the sale of their home.  I'm not too fussed about where the cap is set but I think the principle that somebody can make huge tax-free profits on the sale of their home is wrong.  That's just my opinion - you are obviously free to disagree.

All revenue from the LPT (which is exceptionally low by international standards) accrues to local authorities with consequent off-setting reductions in financial support from the central exchequer.  It is payable on all residential properties (with limited exemptions) and has no connection whatsoever with the current uncapped exemption from CGT on any gains arising on the disposal of a PPR.

We all pay VAT on various products and services.  You obviously don't have to own a property to pay VAT.  Again, there is no connection between VAT and the current uncapped exemption from CGT on any gains arising on the disposal of a PPR.

Incidentally, you were arguing on another thread in favour of the State subsidising the purchase of private residences through MIR.  Do you think that it's fair, in principle, that somebody can make substantial tax-free profits on the sale of an asset the purchase of which was subsidised by the State?  Genuine question.


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## odyssey06 (2 Aug 2017)

Sarenco said:


> Can we please be clear about what we are talking about before you attack any more straw men? I originally said that I thought it would be reasonable if we capped the current exemption from CGT on the sale of a PPR in a similar manner to the position in the US.  That would have zero impact on the vast, vast majority of homeowners.  It would only impact homeowners that realise a very substantial profit on the sale of their home.  I'm not too fussed about where the cap is set but I think the principle that somebody can make huge tax-free profits on the sale of their home is wrong.  That's just my opinion - you are obviously free to disagree.
> All revenue from the LPT (which is exceptionally low by international standards) accrues to local authorities with consequent off-setting reductions in financial support from the central exchequer.  It is payable on all residential properties (with limited exemptions) and has no connection whatsoever with the current uncapped exemption from CGT on any gains arising on the disposal of a PPR.
> We all pay VAT on various products and services.  You obviously don't have to own a property to pay VAT.  Again, there is no connection between VAT and the current uncapped exemption from CGT on any gains arising on the disposal of a PPR.



If you make the argument that we should remove CGT exemption and reference the services that are funded by LPT (e.g. roads) as justification then you are the one linking them and it is entirely legitimate to attack that argument. No straw men involved.

VAT is a contribution to the exchequer. Property tax is a contribution to the exchequer.
The state are not being left out of pocket either from the inherent value of the property or from the rise in its value.
Maintaining a property has costs which also have contributions to the exchequer.
So we have a direct tax on the property AND indirect taxes such as VAT attached to its upkeep.
But still that's not enough???
You cannot use the same argument to justify the tax on the services and the tax on the property and then turn around and say we need to use CGT to pocket even more contributions.
One of the arguments you used as justification was that the property has inherent value because of its access to services provided by the state.
How is it a straw man to point out that that is the purpose of property tax? And also development levies if it was a recent build?



> Incidentally, you were arguing on another thread in favour of the State subsidising the purchase of private residences through MIR.  Do you think that it's fair, in principle, that somebody can make substantial tax-free profits on the sale of an asset the purchase of which was subsidised by the State?  Genuine question.



Yes, it is not tax free that needs to be justified, it's tax. The default position should be tax free.
If a legitimate argument has been made to tax X because we need to fund services and the actual tax is related to the value of X, there's no longer any justification for turning around and taxing X again because its value has increased quoting the same services.
Abolish PPR property tax, then talk about removing the CGT exemption on PPRs if you want to have any chance of convincing me that that justification has real merit.

As for fairness... if the property increased in value by €250,000 how does the state lay fair claim on that increase when it cannot show that it was its actions or expenditures that caused the increase? The property increasing in value by €250,000 does not result in more public expenditure, or more demands on the police's time, or the health service's resources. If the property has not increased in value the commitments on the state's resources would be identical.
No additional state resources were consumed in adding value to the property.

In theory a re-balancing of CGT so that CGT across the board is reduced, with the introduction of CGT above a certain limit on PPRs could make sense.
As you mentioned, encourage investments rather than money into property.
But that'd be in theory, I would not trust this government to carry out such a re-balancing! I could see people putting money into investments on the basis of lower CGT only for a future government to put it back up.


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## Gordon Gekko (2 Aug 2017)

Sarenco,

I don't believe that invoking the ridiculously low US thresholds smacks of reasonableness, or that a €211k threshold would see very few people affected.

And riddle me this...say I've spent €300k doing up my home...I didn't keep the receipts because I didn't need to...now I need them...how does that work?

In any event this is a non-story. The joke of a report deals with all taxes and the main reliefs, and points out what could be done. It's no more a recommendation than the man in the moon.

Gordon


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## Sarenco (2 Aug 2017)

odyssey06 said:


> If you make the argument that we should remove CGT exemption



I really don't understand why you insist on continually misrepresenting my comments.  I didn't argue for the removal of the current exemption from CGT on the sale of a PPR.  I simply expressed the opinion that I think it would reasonable to cap the current exemption.

I have already tried to explain to you why there would be no element of double taxation here.  Any gain arising on the disposal of a PPR would never have been previously taxed (or exempted from taxation). 

I am not trying to convince you of anything.  I simply asked whether you thought it was reasonable in principle that any profit arising on the disposal of an asset, the purchase of which was subsidised by the State, should be tax free.


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## Gordon Gekko (2 Aug 2017)

That's not entirely true; the unrealised gain will be subject to LPT and then the realised gain would attract CGT.


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## odyssey06 (2 Aug 2017)

Sarenco said:


> I really don't understand why you insist on continually misrepresenting my comments.  I didn't argue for the removal of the current exemption from CGT on the sale of a PPR.  I simply expressed the opinion that I think it would reasonable to cap the current exemption.



It tends to be harder for a government to remove exemptions than it is to gradually reduce caps to such an extent that the tax applies to all.
By arguing for removal, you would make it easier for a government to go the extra mile.
But I should not conflate your views with such a government even as I express my concerns about where the policy could eventually lead.


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## Sarenco (2 Aug 2017)

Gordon Gekko said:


> I don't believe that invoking the ridiculously low US thresholds smacks of reasonableness, or that a €211k threshold would see very few people affected.



The US home sales exemption was framed back in 1997 - I'm sure the caps will be raised at some point.  I would have no problem capping the exemption at a gain of €500k per person - I'm not hung up on a particular figure.  It's really the principle that somebody can realise an enormous tax-free profit on the disposal of their PPR that I'm questioning.



Gordon Gekko said:


> That's not entirely true; the unrealised gain will be subject to LPT and then the realised gain would attract CGT.



Huh?  I said that any gain arising on the disposal of a PPR would never have been previously taxed (or exempted from taxation) - that is entirely true.


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## Sarenco (2 Aug 2017)

odyssey06 said:


> I didn't pick up on the difference between the active "arguing for the removal" versus the passive "reasonable to do so"... Sorry - I should have spotted that sooner.



That's not an important distinction.  But there is a world of difference between capping an exemption from tax and removing that exemption entirely.  Again, I am not arguing for the removal of the exemption.

I do not believe it would be politically possible (or desirable) to cap the exemption at a level that would impact the vast, vast majority of homeowners.


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## odyssey06 (2 Aug 2017)

Sarenco said:


> I do not believe it would be politically possible (or desirable) to cap the exemption at a level that would impact the vast, vast majority of homeowners.



I hope you are right that it would not be politically possible... I am more nervous about this possibility coming to pass and I hope to be wrong about that eventuality. I'm not sure if I'm being unduly pessimistic or if you are being optimistic! ... I guess that's Ireland for you and these hodge-podge governments


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## Gordon Gekko (2 Aug 2017)

Sarenco said:


> The US home sales exemption was framed back in 1997 - I'm sure the caps will be raised at some point.  I would have no problem capping the exemption at a gain of €500k per person - I'm not hung up on a particular figure.  It's really the principle that somebody can realise an enormous tax-free profit on the disposal of their PPR that I'm questioning.
> 
> 
> 
> Huh?  I said that any gain arising on the disposal of a PPR would never have been previously taxed (or exempted from taxation) - that is entirely true.



How it entirely true?!

I buy a place for €800k...it increases in value to €1m. I pay LPT on the €200k uplift every year and then the suggestion is that I pay CGT on the €200k when I sell it.


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## torblednam (2 Aug 2017)

Gordon Gekko said:


> How it entirely true?!
> 
> I buy a place for €800k...it increases in value to €1m. I pay LPT on the €200k uplift every year and then the suggestion is that I pay CGT on the €200k when I sell it.



Not in the scenario you quoted? You'd need to sell it for in excess of €1.3m (without any enhancement)...


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## Sarenco (2 Aug 2017)

Gordon Gekko said:


> How it entirely true?!



Gordon

Please re-read what I actually said - CGT only arises where a profit is realised on the disposal of an asset.


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## Sarenco (2 Aug 2017)

torblednam said:


> Not in the scenario you quoted? You'd need to sell it for in excess of €1.3m (without any enhancement)...



Acquisition and disposal costs would also be deductible in calculating any taxable gain.  So you are looking at a pretty significant profit on the disposal of a PPR before any CGT liability arises under the US system.  

Also, CGT is obviously only payable on that element of the gain that is not otherwise exempt.


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## jjm (2 Aug 2017)

odyssey06 said:


> I hope you are right that it would not be politically possible... I am more nervous about this possibility coming to pass and I hope to be wrong about that eventuality. I'm not sure if I'm being unduly pessimistic or if you are being optimistic! ... I guess that's Ireland for you and these hodge-podge governments



A few years ago lobby/pressure groups like the I F A would have  made submissions to the Government on the likes of the fair deal scheme you would hear no more until Budget day announcements of a change in there Favourable to there cause not any more. The new political reality is a way will be found to say no at arms length from the Government of the day,

There was a time when they would/could borrow money so the would not have to tax powerful pressure groups  that day is gone no matter who is in government.

Governments promising to spend more means new taxes or old taxes need to be increased to pay for this.Growing the Economy brings in more taxes as we can see growing the Economy also means we finish up having to spend more taxes to service the pressure this creates.The fastest growing economy in Europe dose not mean we are the best it just means other European countries go for better balance,


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## odyssey06 (2 Aug 2017)

Sarenco said:


> Incidentally, you were arguing on another thread in favour of the State subsidising the purchase of private residences through MIR.  Do you think that it's fair, in principle, that somebody can make substantial tax-free profits on the sale of an asset the purchase of which was subsidised by the State?  Genuine question.



ps I think it would be better rather than getting rid of MIR completely, to replace it with a scheme whereby people who opt for MIR are thereby committing themselves to a 'clawback' of the MIR e.g. liability at 33% or 50% of the asset gain up to a maximum of the MIR amount.
The key thing is that the 'clawback' is limited in some way by the MIR amount (perhaps interest adjusted), it does not become a general grab at the asset gain.


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## Gordon Gekko (2 Aug 2017)

Sarenco said:


> Gordon
> 
> Please re-read what I actually said - CGT only arises where a profit is realised on the disposal of an asset.



No Sarenco, you said "any gain arising on the disposal of a PPR would never have been previously taxed...that is entirely true".

That is not the case. Any uncrystallised uplift will be subject to LPT. That's "previously taxed".


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## Gordon Gekko (2 Aug 2017)

torblednam said:


> Not in the scenario you quoted? You'd need to sell it for in excess of €1.3m (without any enhancement)...



Where are you getting €1.3m from?

The discussion is around taxing gains on a PPR; €1m less €800k base cost is €200k taxable.


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## Sarenco (2 Aug 2017)

Gordon Gekko said:


> Where are you getting €1.3m from?
> 
> The discussion is around taxing gains on a PPR; €1m less €800k base cost is €200k taxable.



You are ignoring the fact that the first $250k of profit per taxpayer on the disposal of a PPR is exempt from CGT in the US.  I don't think anybody is advocating the complete abolition of the exemption - we are talking about the merits of capping the exemption.


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## Sarenco (2 Aug 2017)

Gordon Gekko said:


> No Sarenco, you said "any gain arising on the disposal of a PPR would never have been previously taxed...that is entirely true".
> 
> That is not the case. Any uncrystallised uplift will be subject to LPT. That's "previously taxed".



No Gordon - what I actually said is entirely true.  

I didn't say anything about uncrystallised gains arising prior to a disposal - you added that diversion.


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## Gordon Gekko (2 Aug 2017)

I wasn't talking about a $250k cap, simply the principle of taxing any portion of the gain.

But fine...bought it for €400k, selling it for €800k. Assume €250k exemption. A €50k CGT bill would be a joke in such circumstances.


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## jjm (2 Aug 2017)

Brendan Burgess said:


> *Prospect of capital gains tax on family home raised*
> * Move is among tax reform options put forward by Department of Finance group*
> _
> Among the options outlined are allowing relief only for homes up to a certain market value, or allowing relief on gains up to a certain cash limit with tax being imposed on any sum above that amount.
> ...



This is just softening people up and getting them used of the idea nothing will happen until after the next election all in the name of reform,ye must have a short memory not much discussion before the rent cap

Bringing in the rent cap was a mine field and they got round it .the above is a walk in the park when the time comes,


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## Gordon Gekko (2 Aug 2017)

Sarenco said:


> No Gordon - what I actually said is entirely true.
> 
> I didn't say anything about uncrystallised gains arising prior to a disposal - you added that diversion.



No Sarenco, you're entirely wrong! 100% wrong, and it's bizarre to claim that what you said is "entirely true".

"any gain arising on the disposal of a PPR would NEVER have been previously taxed...that is entirely true"

I buy a place for €400k, it increases in value to €800k. Your €250k exemption applies. The €150k ends up subject to LPT and ultimately subject to CGT. It is erroneous in the extreme to suggest that it has never been taxed previously; it ends up being taxed on paper and then taxed in reality; double taxation in any man's language.


----------



## Sarenco (2 Aug 2017)

Gordon Gekko said:


> No Sarenco, you're entirely wrong! 100% wrong, and it's bizarre to claim that what you said is "entirely true".



No Gordon it is entirely accurate to say that any gain arising on a disposal would never have been previously taxed.  It is 100% accurate.

LPT is payable by reference to a self-assessed valuation of a property at a particular point in time.  If a property falls within a particular valuation band at that point in time then LPT is payable at the relevant rate.  

CGT by contrast is payable on the realised profit (with all appropriate deductions) following the disposal of an asset.

Two completely different things.


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## Gordon Gekko (2 Aug 2017)

You are 100% wrong Sarenco. 100% wrong. You are in Trump territory at this stage. That Iraqi chap who used to claim the American would be vanquished is smiling down at you as we speak!


----------



## Sarenco (2 Aug 2017)

Gordon Gekko said:


> But fine...bought it for €400k, selling it for €800k. Assume €250k exemption. A €50k CGT bill would be a joke in such circumstances.



You could just as easily say that it is a "joke" that an individual can realise a €400k tax-free profit on the sale of any other asset.  It's an equally uncompelling argument.


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## Sarenco (2 Aug 2017)

Gordon Gekko said:


> You are 100% wrong Sarenco. 100% wrong. You are in Trump territory at this stage. That Iraqi chap who used to claim the American would be vanquished is smiling down at you as we speak!



Sorry Gordon but I have already explained why I am not wrong.

Simply repeating yourself and descending into ad hominem is really childish.


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## Gordon Gekko (2 Aug 2017)

"any gain arising on the disposal of a PPR would NEVER have been previously taxed...that is entirely true"

My property increases in value - I pay LPT on the gain. I realise the gain, and then I pay CGT. By any stretch of the imagination, the gain has been previously taxed.


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## Brendan Burgess (2 Aug 2017)

Thread closed until people calm down. 

Folks - please do not accuse people with different views to your own as trolling. 

Thanks

Brendan


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## Brendan Burgess (3 Aug 2017)

OK folks

I have reopened the thread. 

It's fine to have different points of view. 

It's fine to interpret the same facts differently. 

But it's boring for the rest of us if you keep making the same points and attacking each other. 

Brendan


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## noproblem (3 Aug 2017)

AND WHAT EXACTLY DO PEOPLE DO WITH ALL THIS UNDER THE COUNTER CASH? One can hardly invest it, then take whatever profit they make again and put that under the carpet as well. That carpet is going to have bulges, then questions will need answering and revenue appear on the scene. Won't take long for bulges in the carpet to disappear then.  In any case, this scenario whereby one can take massive money/profit from the sale of a family home needs looking at and lets hope some goverment takes this on and to hell with all the complaints from Tom, Dick and Harry and their Mrs's as well.


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## torblednam (3 Aug 2017)

I can understand an objection to taxing PPR disposals, on the basis that it might have an adverse effect on the property market and exacerbate a housing crisis - I'd like to see that objection fleshed out however, as the specific events (or decisions) that would have this effect are not clear to me.

I don't believe there should be any sacred cows when it comes to taxation, and at the moment the PPR seems to be a sacred cow. By sacred cow, I mean something that is exempt from taxation because that's the way it's always been or because it's considered politically unpalatable to curtail the exemption. The alternative to a sacred cow being a good old fashioned productive cow, which in this context is a tax exemption which serves to achieve a clear policy objective of the successive governments that continue the exemption. 

It's not clear to me that a blanket exemption such as currently exists, is in the best interests of society as a whole. I see no good reason why a person (particularly someone who has benefitted from one of the many forms of tax relief or subsidies that have existed down through the years), who is actually realising the gain in the value of their PPR, shouldn't have the potential to be taxed on it.

To be clear, I'm not saying that ALL the gain should be taxed, and I'm not saying that the CGT rate should necessarily be the same as applies to most assets. I'm simply saying I'd like to see a convincing argument as to what principle it is that causes people to so strongly oppose the suggestion of any taxation on any gain.


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## odyssey06 (3 Aug 2017)

Wasn't one of the IMF inspired rationales for bringing in property tax and removing the likes of stamp duty was to replace a fluctuating revenue source with a stable, annualised one? Do we want the government to get addicted to tax from property sales again? That ended so well the last time.

We have a property tax. It is based on the value of the property. It is more stable than CGT. Let's rely on it.


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## jjm (3 Aug 2017)

odyssey06 said:


> Wasn't one of the IMF inspired rationales for bringing in property tax and removing the likes of stamp duty was to replace a fluctuating revenue source with a stable, annualised one? Do we want the government to get addicted to tax from property sales again? That ended so well the last time.
> 
> We have a property tax. It is based on the value of the property. It is more stable than CGT. Let's rely on it.



It is based on the value of the property you also have to take into account where it is located it is not just the value of the property .local politics unfortanely come into play.

Do you not realise The IMF are gone they have reversed all the changes made by the IMF/TRIOKA which can only mean one thing there addiction is back now it is just a matter of which house with money do the rob to feed there habit.


----------



## odyssey06 (3 Aug 2017)

Surely this puts at risk more FG votes than it could ever hopes to deliver. Its not even clever politics. I can see this working very well on the doorstep... for all the other parties.

Would the last FG voter turn out the light?


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## Brendan Burgess (3 Aug 2017)

odyssey06 said:


> Surely this puts at risk more FG votes than it could ever hopes to deliver. Its not even clever politics. I can see this working very well on the doorstep... for all the other parties.
> 
> Would the last FG voter turn out the light?



You might be right. 

But leaving politics aside, is it a good idea to limit the CGT exemption on family homes? 

Brendan


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## Protocol (3 Aug 2017)

odyssey06 said:


> Surely this puts at risk more FG votes than it could ever hopes to deliver. Its not even clever politics. I can see this working very well on the doorstep... for all the other parties.
> 
> Would the last FG voter turn out the light?



No politician has suggested this.

It was one of many suggestions in a civil service TSG document.

http://www.finance.gov.ie/what-we-do/tax-policy/tax-strategy-group


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## jjm (3 Aug 2017)

odyssey06 said:


> Surely this puts at risk more FG votes than it could ever hopes to deliver. Its not even clever politics.


There are more votes to be got from reversing the changes  .What is left of the old FG voters the will still Vote FG .The only place FG will pick up votes is stealing the addits from FF and Labour each is worth 2 votes one more for FG one Less For FF or LABOUR,they need to hold on to any labour votes who changed to FG last time to stay ahead of FF,


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## odyssey06 (3 Aug 2017)

Brendan Burgess said:


> You might be right.
> But leaving politics aside, is it a good idea to limit the CGT exemption on family homes?
> Brendan



Across the board and without any re-balancing of CGT rates to favour investments ... no. I think it's bad politics and bad economics (which is why the IMF favoured property tax over stamp duty).

I think it would be better to link CGT exemption with participation in government scheme e.g. first time buyers grant or more preferably mortgage interest relief going forwards ... If you signed up to the scheme, the government now have a vested interest in the property and if the asset rises in value and you dispose of it, assuming you have made a gain, you pay back the value of the assistance.
But the ship may have sailed on that.

Or, flying a kite here so may not have thought it through... you get a CGT exempted value for use against either property or investments or some combination of them?

Alternatively, a limit of the number of CGT PPR exemptions transactions e.g. 1 every X years or  X per lifetime would be ok. If there is a concern that people are flipping houses that should be tailored to catch them.


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## jjm (3 Aug 2017)

Brendan Burgess said:


> You might be right.
> 
> But leaving politics aside, is it a good idea to limit the CGT exemption on family homes?
> 
> Brendan


You would need to have a debate on what is is going to be spent on to know if it is going to be a good idea.I expect  some pressure group will rob all and sign up to get it every year from then on  better left where it is ,We could finish up driving up the cost of living on everyone including the addits,


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## jpd (3 Aug 2017)

And while we are all discussing and agreeing about CGT on family homes, they will sneak another tax rise through without anyone noticing - unless it's another float a balloon and let's see what happens


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## torblednam (3 Aug 2017)

odyssey06 said:


> Wasn't one of the IMF inspired rationales for bringing in property tax and removing the likes of stamp duty was to replace a fluctuating revenue source with a stable, annualised one? Do we want the government to get addicted to tax from property sales again? That ended so well the last time.
> 
> We have a property tax. It is based on the value of the property. It is more stable than CGT. Let's rely on it.



That rationale would suggest residential  investment properties shouldn't be subject to CGT.


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## torblednam (3 Aug 2017)

jpd said:


> And while we are all discussing and agreeing about CGT on family homes, they will sneak another tax rise through without anyone noticing - unless it's another float a balloon and let's see what happens



I have a feeling this is going to keep popping up, already addressed:



Protocol said:


> No politician has suggested this.
> 
> It was one of many suggestions in a civil service TSG document.
> 
> http://www.finance.gov.ie/what-we-do/tax-policy/tax-strategy-group


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## odyssey06 (3 Aug 2017)

torblednam said:


> That rationale would suggest residential  investment properties shouldn't be subject to CGT.



At the time I think 75% of properites were owner occupied so volume is relevant here ... If the situation was reversed and the state become reliant on the CGT sales of an investment property market of 75% then there would be a danger of history repeating itself if the state expands its expenditure based on these kind of 'windfall' unpredictable gains... and then the gains dry up.

The below is an excerpt from an DoF document justifying the introduction of property tax... maybe it's the same group now flying a kite for CGT on PPRs... if so, it begs the question were they talking nonsense then or now... possibly they were stone cold scared sober then and are now craving the old hit once again.

From the Department of Finance Tax Strategy Group:

_"An annual property tax provides a reliable and sustainable source of revenue as compared to the transaction taxes on property which characterised Ireland’s recent approach to property taxation. Stamp Duty on property transactions, which is dependent on transaction levels and values, is particularly subject to fluctuations, especially in times of buoyant property prices and markets which characterised the
2003 to 2007 period. Capital Gains Tax and Capital Acquisitions Tax which involve taxing the appreciation of an asset on sale or inheritance are also subject to fluctuations closely related to changes in asset values and the level of transactions in the property market. From 1998 onwards the strong relationship between economic growth and the resultant *increase in the taxation yield from property transfers and rising asset values led to an over-reliance on this source of revenue. This over-reliance has led, in turn, to serious difficulties for the Exchequer* in the context of the decline in economic activity which particularly impacted on the property market in recent years with an associated sharp decrease in property transfers and values."_

*Mark Barrett (President, Irish Tax Institute): * _"We paid the price for being exposed in relation to Capital Gains Tax, Stamp Duty and Transaction Taxes."_
[broken link removed]


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## torblednam (3 Aug 2017)

odyssey06 said:


> At the time I think 75% of properites were owner occupied so volume is relevant here ... If the situation was reversed and the state become reliant on the CGT sales of an investment property market of 75% then there would be a danger of history repeating itself if the state expands its expenditure based on these kind of 'windfall' unpredictable gains... and then the gains dry up.
> 
> The below is an excerpt from an DoF document justifying the introduction of property tax... maybe it's the same group now flying a kite for CGT on PPRs... if so, it begs the question were they talking nonsense then or now...
> 
> ...



Broadening the tax base means exactly that though. Withdrawing an exemption broadens the tax base. You're arguing against yourself there.

Edit:
By way of illustration, I looked at the 2007 exchequer receipts, and they contained 3.2bn from stamp duty, and 3.1bn from CGT, making up between them about 13/14% of the tax take.

The 2017 profiles for CGT, stamp duty and LPT total an expected 1.6bn, or 3.2% of the tax take.


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## odyssey06 (3 Aug 2017)

torblednam said:


> Broadening the tax base means exactly that though. Withdrawing an exemption broadens the tax base. You're arguing against yourself there.



I could make a bridge broader, but if it means the weight is borne by an unreliable component, it doesn't seem like a wise plan to me.
Seems like one of the worst things you can do is allow an Irish government to get used to spending the income from a recurring source "particularly subject to fluctuations."


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## odyssey06 (3 Aug 2017)

torblednam said:


> By way of illustration, I looked at the 2007 exchequer receipts, and they contained 3.2bn from stamp duty, and 3.1bn from CGT, making up between them about 13/14% of the tax take. The 2017 profiles for CGT, stamp duty and LPT total an expected 1.6bn, or 3.2% of the tax take.



So CGT alone in 2007 was €3.1 billion? And today it's approximately €1 billion (if we assume the other taxes cover the balance).
We had the same exemptions in 2007 vis a vis 2017?

Maybe the Tax Strategy Group should look at the collapse of CGT gathered under its existing net, before attempting to catch more with it ... Seems like CGT is a decidedly unreliable basis for supporting government spending; and worse, at its present levels it is acting a disincentive to investment?


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## Gordon Gekko (3 Aug 2017)

Losses are still one of the biggest drivers of the low CGT yield...so too is the high rate.

Cut the rate to 20% and apply Entrepreneur Relief to €10m and watch the tax take jump...


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## torblednam (3 Aug 2017)

Gordon Gekko said:


> Losses are still one of the biggest drivers of the low CGT yield...so too is the high rate.
> 
> Cut the rate to 20% and apply Entrepreneur Relief to €10m and watch the tax take jump...



And what about the sacred cow?


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## jjm (3 Aug 2017)

torblednam said:


> And what about the sacred cow?


The sacred cow hopefully will kick you if you try milking her any more you will have to wean yourself off all that milk i am afraid,


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## torblednam (3 Aug 2017)

jjm said:


> The sacred cow hopefully will kick you if you try milking her any more you will have to wean yourself off all that milk i am afraid,


Keep up jj, the sacred cow isn't being milked at all...


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## jjm (3 Aug 2017)

torblednam said:


> Keep up jj, the sacred cow isn't being milked at all...


looks like the only one allowed to suck her is her own calf,she will be milked all right she is careful about who gets the milk

They days are long gone when some lucky calves had two mothers,


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## Sarenco (3 Aug 2017)

torblednam said:


> I can understand an objection to taxing PPR disposals, on the basis that it might have an adverse effect on the property market and exacerbate a housing crisis - I'd like to see that objection fleshed out however, as the specific events (or decisions) that would have this effect are not clear to me.


I'll have a shot at it.

The argument goes that CGT is economically inefficient because it creates a "lock-in" effect, in the sense that it discourages the liquidation of an asset that has appreciated in value.  In the context of this discussion, removing or capping the current PPR exemption might be expected to discourage homeowners from downsizing to accommodation that is more suitable to their needs, moving house to take up a job opportunity, etc.

I happen to think that this argument has some merit, which is why I don't think it would be a good idea to simply repeal the current exemption as opposed to capping the level of gains that can be exempted at a reasonable level (and I don't have a strong view as to what might constitute a reasonable level in this context).

I'm afraid I really don't understand the argument that removing or capping the PPR exemption would have any impact on the supply of housing (aka the housing crisis).  Nor do I understand the argument that the current exemption should remain untouched as a matter of principle.


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## jjm (3 Aug 2017)

Sarenco said:


> I'll have a shot at it.
> 
> Nor do I understand the argument that the current exemption should remain untouched as a matter of principle.


People don't trust the government or the people proposing these changes there is an expectation that any CGT collected will be use  to feather there own nest.They would be better off seeing how they can reform and get more value for the taxes already collected before collecting new taxes to flush down the swanee,

the last new major new tax to be collected is being posted back to the taxpayers because the could not convince the people who paid that it would be collected from everyone who had to pay  and would be well spent well,they were not able to do the job the have and collect the last new tax,


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## Sarenco (3 Aug 2017)

Understood Jim but this isn't a Government proposal.  It's just an option raised by an advisory body.

I find it interesting that people seem to object more to the imposition of new taxes (or capping current exemptions) than they object to increased rates charged under existing tax heads.  Maybe that explains why it is practically impossible to generate any meaningful discussion as to what would constitute fair taxation - the arguments in favour of maintaining the status quo always seem to prevail.

We even have the bizarre situation where our hard left politicians object to property tax!  Is it a post-colonial thing?


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## Gordon Gekko (4 Aug 2017)

https://www.google.ie/amp/s/amp.ind...-of-family-homes-after-backlash-35999210.html

Our Leader has ruled this out.


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## jjm (4 Aug 2017)

The watering down of the LPT showed it is no longer seen as a fair national tax it is now open to abuse the county with the lowest LPT will still get money from central funds possibly coming out of the pockets of the people paying the highest
LPT,
On the post -colonial thing when you look at the smoking ban it did not seam to matter  seen to be fair is the problem  when the stood up to the TD who broke the smoking ban in the Dail the people supported it without question,Its all down to trust,


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## Philip S (4 Aug 2017)

jjm said:


> The watering down of the LPT showed it is no longer seen as a fair national tax it is now open to abuse the county with the lowest LPT will still get money from central funds possibly coming out of the pockets of the people paying the highest
> LPT,
> On the post -colonial thing when you look at the smoking ban it did not seam to matter  seen to be fair is the problem  when the stood up to the TD who broke the smoking ban in the Dail the people supported it without question,Its all down to trust,



Is their not something about if you reduce your rate of LPT you cannot get or are limited in funds you get from the central fund


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## torblednam (4 Aug 2017)

All messing about sacred cow metaphors aside, I'm still waiting for someone to explain to me what the problem in principle is with a PPR being potentially subjected to some level of CGT.


----------



## T McGibney (4 Aug 2017)

torblednam said:


> All messing about sacred cow metaphors aside, I'm still waiting for someone to explain to me what the problem in principle is with a PPR being potentially subjected to some level of CGT.


There's never much problem in principle with any new tax.  The problems arise in practice. This suggestion if acted upon will have devastating effects on families and on the availability of housing.


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## odyssey06 (4 Aug 2017)

torblednam said:


> All messing about sacred cow metaphors aside, I'm still waiting for someone to explain to me what the problem in principle is with a PPR being potentially subjected to some level of CGT.



In principle, I object to all forms of taxation and they are borne under sufferance and any tax must be justified. It is not the exemption that needs to be justified, it is the tax that needs to be justified to convince the people why it is necessary.
Also I think all new taxes require a mandate from the people i.e. they should be part of election manifesto. Otherwise they are illegitimate and as far as I'm concerned civil disobedience of them is morally justified.


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## torblednam (4 Aug 2017)

T McGibney said:


> There's never much problem in principle with any new tax.  The problems arise in practice. This suggestion if acted upon will have devastating effects on families and on the availability of housing.



That's the second time you've said that, and apologies if I'm being a bit thick, but how exactly would this happen, in practice? Even if there was a rollover relief and a tax free threshold for gains?


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## torblednam (4 Aug 2017)

odyssey06 said:


> In principle, I object to all forms of taxation and they are borne under sufferance and any tax must be justified. It is not the exemption that needs to be justified, it is the tax that needs to be justified to convince the people why it is necessary.
> Also I think all new taxes require a mandate from the people i.e. they should be part of election manifesto. Otherwise they are illegitimate and as far as I'm concerned civil disobedience of them is morally justified.



That might be your view, but unfortunately it's not actually supported by law, and you don't seem to understand how our constitutional democracy works.


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## Early Riser (4 Aug 2017)

odyssey06 said:


> In principle, I object to all forms of taxation and they are borne under sufferance and any tax must be justified. It is not the exemption that needs to be justified, it is the tax that needs to be justified to convince the people why it is necessary.



Ok - So hypothetically if this reservation could be satisfied and there was widespread agreement that an additional take was required, would you still hold out against this CGT proposal as opposed to, say, a rise in income tax levels?


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## T McGibney (4 Aug 2017)

torblednam said:


> That's the second time you've said that, and apologies if I'm being a bit thick, but how exactly would this happen, in practice? Even if there was a rollover relief and a tax free threshold for gains?


Because there would be inherent disincentive to downsize  and a further one to improve or extend cheaper properties. 

Besides, this being Ireland, some genius like Brian Lenihan will eventually come along and scrap the rollover relief, or make it conditional on having LPT paid up or something.


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## odyssey06 (4 Aug 2017)

torblednam said:


> That might be your view, but unfortunately it's not actually supported by law, and you don't seem to understand how our constitutional democracy works.



You don't seem to understand the question that was asked.
I wasn't asked a question about the law, or about how constitutional democracy works. 
I was asked why I objected to what is in effect a new tax.
I have earlier also explained why this is bad politics, which showed an understanding not just of our democracy, but of our politcal parties and their voting base. 
You may agree or disagree with that understanding, you may not like the reasons for my objection, fine... but patronising lines will be met in kind.


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## odyssey06 (4 Aug 2017)

Early Riser said:


> Ok - So hypothetically if this reservation could be satisfied and there was widespread agreement that an additional take was required, would you still hold out against this CGT proposal as opposed to, say, a rise in income tax levels?



Taxes are already too high. We don't need an additional take we need to cut spending.
So it'll be a long time before I'd agree to a new tax purely from a revenue gathering perspective, unless the tax is intended to also reduce detrimental bevaviour (either to the economy or society).

I would only agree with a re-balancing of tax rates as in there must be a reduction in tax elsewhere or else such additional benefit such as mortgage interest relief.


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## Early Riser (4 Aug 2017)

odyssey06 said:


> Taxes are already too high. We don't need an additional take we need to cut spending.
> So it'll be a long time before I'd agree to a new tax purely from a revenue gathering perspective, unless the tax is intended to also reduce detrimental bevaviour (either to the economy or society).
> 
> I would only agree with a re-balancing of tax rates as in there must be a reduction in tax elsewhere or else such additional benefit such as mortgage interest relief.



odyssey06 - I notice you evaded answering the actual question. You're not thinking of taking up politics yourself?


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## odyssey06 (4 Aug 2017)

Early Riser said:


> odyssey06 - I notice you evaded answering the actual question. You're not thinking of taking up politics yourself?



If I took up politics I would have to evade a lot of questions!

So for a new tax I'd have to be convinced that:
(1) We need the additional revenue 
Answer: I oppose the tax as today we don't need it, we need to cut or at least control spending.
(2) Or, the new tax is intended as a disincentive to detrimental economic or social behaviour 
Answer: What's detrimental about owning own home? Nothing. We may actually want to encourage downsizing, not discourage it, which this tax would do. 
(3) Or, we want to encourage positive economic behaviour 
Answer: If we want people to invest in companies, shares etc rather than property, lobbing a new tax onto property is not the whole answer. We need to use carrot and stick. The new tax should not be an excuse to grab more tax out of property but a genuine attempt at re-balancing the tax take so as to encourage more 'productive' behaviour.

This new tax meets none of those critera. I am against it. Vote for me


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## Early Riser (4 Aug 2017)

odyssey06 said:


> If I took up politics I would have to evade a lot of questions!



True ! But back to my question - hypothetical as it is. If there was widespread popular support for a need to increase the overall tax take (for whatever widely agreed purpose) would you still hold out against this CGT proposal if the alternative was an increase in income tax rates? Which alternative would you object least to if, by democratic popular demand, some tax rise was inevitable?

No answer - no vote!


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## T McGibney (4 Aug 2017)

Early Riser said:


> True ! But back to my question - hypothetical as it is. If there was widespread popular support for a need to increase the overall tax take (for whatever widely agreed purpose) would you still hold out against this CGT proposal if the alternative was an increase in income tax rates? Which alternative would you object least to if, by democratic popular demand, some tax rise was inevitable?
> 
> No answer - no vote!


May I answer that for myself?

My answer: increase Income Tax.
My reason: people will feel it almost immediately in their pockets and accordingly pressure will build to cut both it and the overall tax take.

This won't be the case with CGT on PPR's which merely incentivises homeowners to hold on to their properties until they die, at which time no CGT arises anyway.


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## jjm (4 Aug 2017)

Early Riser said:


> True ! But back to my question - hypothetical as it is. If there was widespread popular support for a need to increase the overall tax take (for whatever widely agreed purpose) would you still hold out against this CGT proposal if the alternative was an increase in income tax rates? Which alternative would you object least to if, by democratic popular demand, some tax rise was inevitable?
> 
> No answer - no vote!


I think there is widespread sopport for the view that Increasing tax will not give you better services by the people providing them at the front line who are taxpayers  until you fix this there is no point in increasing tax 


If We need more tax the USC should be increased and the funds targeted at whatever widely agreed purpose it is collected for and kept seperate from general taxation,USC was not popular which means it reached into places where tax was not collected from before
In Germany the had a 5.5% special tax when the country reunited I think we need something like it hear to address/target issues due to bad Government planning .the spotlight would be on the Government to get value for money by not allowing it to go into General taxation and get lost ,  It would stop pressure groups from raiding the fund .


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## Early Riser (4 Aug 2017)

T McGibney said:


> May I answer that for myself?
> 
> My answer: increase Income Tax.
> My reason: people will feel it almost immediately in their pockets and accordingly pressure will build to cut both it and the overall tax take.
> ...



Thanks. I am just trying to clarify for myself if the apparent strength of opposition to this proposal is anti-tax in general, or because of inherent unfairness or adverse consequences of the specific proposal itself. Also I am just trying to get my own head around the pros and cons.

I see and accept the argument that a bald application of CGT to PPRs could lead to adverse consequences, such as those you identify. But I think if we could ever envisage a comprehensive overhaul of the tax system (with a much wider base - a small tax on everything, no exemption) then a form of CGT could be formulated to address these potential consequences. As the population ages we are going to be forced to review everything around taxation and spending anyway.

Leaving aside the immediate housing crisis, we have historically been over-focussed on the family home as a kind of investment strategy. Does this make housing (a social issue) very vulnerable to the shocks of inevitable market fluctuations ? I accept the contradiction that applying CGT feeds into the home as investment perception, but at least it weakens its appeal as an investment strategy as opposed to other market activity, no ? A home as a place to live rather than an investment ?

jjk - I agree that USC should be one part of a wide - but low - tax base. I see the CGT proposal as fitting into that too. Following on from your comments about the unpopularity of USC because of where it reached into would you think the same applies to the CGT proposal? The older section of our society has been most sheltered from the effects of austerity and has been asked to contribute least towards recovery. I am speaking overall, I realize there are many specific exceptions.


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## T McGibney (4 Aug 2017)

Early Riser said:


> Leaving aside the immediate housing crisis, we have historically been over-focussed on the family home as a kind of investment strategy. ?



Have we? Many people take some sort of pride in the theoretical value of their home, but most people only sell if they want to trade up or down. There was a shortlived fashion around 2006 of people selling and relocating purely to realise large capital gains but this didn't last.

For that reason, I don't see how CGT on PPRs will ever generate much actual tax receipts for the exchequer.


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## Early Riser (4 Aug 2017)

T McGibney said:


> Have we? .



Yes, I think we have, at least in the psychological sense. Possibly it even has historical roots - the association of wealth and power with property. And apart from selling it is perceived as a way of building up an investment to hand on after death.


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## T McGibney (4 Aug 2017)

Early Riser said:


> Yes, I think we have, at least in the psychological sense. Possibly it even has historical roots - the association of wealth and power with property. And apart from selling it is perceived as a way of building up an investment to hand on after death.


Any actual evidence of that, though? We don't often see people trading in their homes for other assets, the pre-crash bubble period fashion notwithstanding.


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## Early Riser (4 Aug 2017)

T McGibney said:


> Any actual evidence of that, though?



Of the home been seen as an investment in the psychological sense ? No, maybe it exists - I haven't researched it. As a way of passing on wealth ? Opposition to inheritance taxes ?


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## jjm (4 Aug 2017)

Early Riser said:


> Of the home been seen as an investment in the psychological sense ? No, maybe it exists - I haven't researched it. As a way of passing on wealth ? Opposition to inheritance taxes ?


How often do we see someone quoting reserch to back up there argument only to see someone else quoting reserch to back up the opposite view ,


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## torblednam (4 Aug 2017)

jjm said:


> How often do we see someone quoting reserch to back up there argument only to see someone else quoting reserch to back up the opposite view ,



So...... all research is useless?


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## torblednam (4 Aug 2017)

odyssey06 said:


> You don't seem to understand the question that was asked.
> I wasn't asked a question about the law, or about how constitutional democracy works.
> I was asked why I objected to what is in effect a new tax.
> ...
> You may agree or disagree with that understanding, you may not like the reasons for my objection, fine... but patronising lines will be met in kind.



I definitely do disagree with your understanding. Changing an exemption within an existing tax is not "in effect a new tax", any more than changing tax credits or rates of tax is a new tax.

We definitely approach it from different perspectives though. Your view is that nothing should be taxed and all taxes should be justified. Tax is theft and all that. Which is fine. I don't necessarily disagree with that as a principle. 

However, Capital Gains Tax exists, so my rationale starts from a point where the tax itself has already been justified insofar as necessary (since it exists and continues to do so). All assets are within the scope of CGT, unless specifically exempted or relieved. My question is, what is the principle which requires a PPR to continue to be viewed in a different category to other assets that aren't exempt or fully exempt from CGT.


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## odyssey06 (4 Aug 2017)

torblednam said:


> I definitely do disagree with your understanding. Changing an exemption within an existing tax is not "in effect a new tax", any more than changing tax credits or rates of tax is a new tax. We definitely approach it from different perspectives though. Your view is that nothing should be taxed and all taxes should be justified. Tax is theft and all that. Which is fine. I don't necessarily disagree with that as a principle.



I see where you are coming from, but if something is *completely *exempt from the tax, then bringing it into the net is effectively a new tax as far as I'm concerned. It's a qualitative difference rather than a quantitative difference. Going from 0 to 1, or 100 to 99, is different in kind to going from 33 to 34?



> My question is, what is the principle which requires a PPR to continue to be viewed in a different category to other assets that aren't exempt or fully exempt from CGT.



You have to have a house to live in. Housing is a basic human right.
If you do not have a house, the state steps in to provide you with accomodation.
Owning a house therefore removes the state from the burden of a responsibility \ obligation \ duty of care \ liability. This doesn't apply to other assets in the scope of CGT, or doesn't apply to the same extent?

_(those are not rhetorical question marks, they indicate that what I said is a proposition...)_


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## torblednam (4 Aug 2017)

odyssey06 said:


> I see where you are coming from, but if something is *completely *exempt from the tax, then bringing it into the net is effectively a new tax as far as I'm concerned. It's a qualitative difference rather than a quantitative difference. Going from 0 to 1, or 100 to 99, is different in kind to going from 33 to 34?



What about the case of a house that has been both a PPR and a let property during its period of ownership, which is currently only partially exempt from tax (based on proportionate periods of use as PPR or otherwise). 

Under your analysis the loss of partial exemption constitutes a new tax. That doesn't really make sense.


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## odyssey06 (4 Aug 2017)

torblednam said:


> What about the case of a house that has been both a PPR and a let property during its period of ownership, which is currently only partially exempt from tax (based on proportionate periods of use as PPR or otherwise). Under your analysis the loss of partial exemption constitutes a new tax. That doesn't really make sense.



Switching its use to a 'let' property represents a material change though. If I switch my car to commercial use temporarily I expect to be treated as a commercial entity for tax purposes, and lose any exemptions I have relating to domestic use - regardless of whether there is or is not taxation on domestic car use. Ditto for say my car insurance policy.


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## torblednam (4 Aug 2017)

odyssey06 said:


> Switching its use to a 'let' property represents a material change though. If I switch my car to commercial use temporarily I expect to be treated as a commercial entity for tax purposes, and lose any exemptions I have relating to domestic use - regardless of whether there is or is not taxation on domestic car use. Ditto for say my car insurance policy.



Ok. Again I'm not sure I'd agree, but it doesn't have to be let. You could find yourself in the fortunate position of it becoming a second/holiday home. It'd still be your residence, just not your PPR.


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## odyssey06 (4 Aug 2017)

torblednam said:


> Ok. Again I'm not sure I'd agree, but it doesn't have to be let. You could find yourself in the fortunate position of it becoming a second/holiday home. It'd still be your residence, just not your PPR.



Maybe I'm wearing my IT hat when I say this but at the level of the mechanics of introducing this, it's fundamentally different going from 0 to 1 or 100 to 99 than from 33 to 34 because in terms of effect 0 and 100 don't exist yet ... Changing the rate of a tax, or the threshold at which it kicks in at is not a scope change.
Existing Revenue systems and processes remain unchanged in effect. No new page required on Revenue.ie or Citizens Information website, just update the existing.
Now we'd be talking about having CGT with possibly a different rate and different exemptions, one for residences and one for investment properties.
It's a scope change. Work would be needed on revenue systems and processes.


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## torblednam (4 Aug 2017)

odyssey06 said:


> Maybe I'm wearing my IT hat when I say this but at the level of the mechanics of introducing this, it's fundamentally different going from 0 to 1 or 100 to 99 than from 33 to 34 because in terms of effect 0 and 100 don't exist yet ... Changing the rate of a tax, or the threshold at which it kicks in at is not a scope change.
> Existing Revenue systems and processes remain unchanged in effect. No new page required on Revenue.ie or Citizens Information website, just update the existing.
> Now we'd be talking about having CGT with possibly a different rate and different exemptions, one for residences and one for investment properties.
> It's a scope change. Work would be needed on revenue systems and processes.



The only aspect of the above which is actually correct re what you're calling a scope change, is if a standalone rate is brought in, which isn't the same as one of the historic rates already included on the form.

There's a section of legislation (s.604 TCA 97) which provides for the relief, and the reduction in relation to periods that the property isn't a PPR etc. This section would need a couple of subsections inserted to give effect to a cap on relief. Existing PPR relief guidance notes etc. get revised to reflect whatever change is brought in.

No change to Revenue systems would be required, and maybe you've never filled in a CGT return, because it's a self assessment tax and the critical bit for the taxpayer to enter is the amount of their chargeable gains. The forms change every year anyway, to cater for all the other "new taxes" that each budget spawns, so even if I'm misunderstanding what constitutes a scope change, it gets dealt with as part of business as usual for Revenue.


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## odyssey06 (4 Aug 2017)

I suppose we're getting into very fine points, but let's think about a different kind of legislation. We already have a ban on smoking in workplaces. Presumably this is worded in such a way that smoking is a private residence is exempt from this ban?

Extending the ban to smoking in a private residence to me would not represent the *removal of an exemption* but would represent the *introduction of an offence*. The original legislation's scope and intention was clearly not to introduce an exemption for private residences, but to introduce the offence of smoking in the workplace only.
If the legislation allowed for the banning of smoking in workplaces with more than X employees, and then it was changed to govern all workplaces, I don't think that would be a scope change \ new offence.

I don't think I can word things more clearly than that, so on this aspect of it I think the case for the defence (or am I the prosecution?) rests. Over to you!


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## torblednam (4 Aug 2017)

odyssey06 said:


> I suppose we're getting into very fine points, but let's think about a different kind of legislation. We already have a ban on smoking in workplaces. Presumably this is worded in such a way that smoking is a private residence is exempt from this ban?
> 
> Extending the ban to smoking in a private residence to me would not represent the *removal of an exemption* but would represent the *introduction of an offence*. The original legislation's scope and intention was clearly not to introduce an exemption for private residences, but to introduce the offence of smoking in the workplace only.
> If the legislation allowed for the banning of smoking in workplaces with more than X employees, and then it was changed to govern all workplaces, I don't think that would be a scope change \ new offence.
> ...



I don't see why we should need to talk about a different kind of legislation, other than to build a straw man. The relevant legislation, systems and processes are all there and I've said my piece on them. 

We're hurtling down an ever narrowing cul de sac here anyway. I can barely remember how we got here but I think it was in relation to whether this would be a new tax or not. 

It isn't, other than by applying a very specific definition of "new tax", which is your one.


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## jjm (5 Aug 2017)

torblednam said:


> So...... all research is useless?


No that is not what i said ,If you were to go off some research and data the government could borrow a lot more money the Government and taxpayer  know better than to go off this data .There possibly is other data that should not be used when  it comes to  spending taxpayers money if it commits them to increasing rates of taxation in the future that is lawfully  possible but may not be collectable.

I paid my lawful water tax only to see the people who took it like my other taxes lawfully sending it back to me because they were not able to collect it even when the law of the land said so.

the under line reason why i am getting it back is because the Government could not show it would be spent well. This now has me questioning how the rest of mt taxes are being spent,

in over 40 years paying tax as a paye worker earning above the average industrial wage taxes are lower now than at any time in my working life  any time I ever  had to seek services that i paid for through tax you always felt you were getting a good service ,When I look back the rot started when the changed the pay related social insurance for working people,


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## odyssey06 (5 Aug 2017)

A lot of research is useless because it's not really research - in the sense of trying to determine the best course of action, or the likely impact of an action or investigate an unknown.
The 'research' that you commission, the question that you ask, all of it is implicit bias. Unless the research can give you an unexpected answer, it's not really research. It's justification. It's cover for a course of action you have already decided upon.

I could have commissioned research that encouraging diesel engines would lead to a reduction in C02 emissions. And used this as the basis for action. But unless I also asked, what are the other impacts of diesel engines... the research is worse than useless. It's dangerous.

I'm sure there's a line in "Yes Minister" about not commissioning a report or inquiry unless you know what its answer will be 
http://www.venchar.com/2004/02/how_to_discredi.html


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## torblednam (5 Aug 2017)

odyssey06 said:


> A lot of research is useless because it's not really research - in the sense of trying to determine the best course of action, or the likely impact of an action or investigate an unknown.
> The 'research' that you commission, the question that you ask, all of it is implicit bias. Unless the research can give you an unexpected answer, it's not really research. It's justification. It's cover for a course of action you have already decided upon.
> 
> I could have commissioned research that encouraging diesel engines would lead to a reduction in C02 emissions. And used this as the basis for action. But unless I also asked, what are the other impacts of diesel engines... the research is worse than useless. It's dangerous.
> ...



Have you actually read back to see the context that research came up in? Early Riser was talking about possible reasons for certain attitudes or behaviours around property, and when asked for evidence said,


Early Riser said:


> Of the home been seen as an investment in the psychological sense ? No, maybe it exists - I haven't researched it. As a way of passing on wealth ? Opposition to inheritance taxes ?


Then jj chipped in with


jjm said:


> How often do we see someone quoting reserch (sic) to back up there (sic) argument only to see someone else quoting reserch (sic) to back up the opposite view ,(sic)


which is actually ironic in this context, since Early Riser had acknowledged he was speculating WITHOUT purporting to have research to back up what he was suggesting.

And now you're treating us to a treatise on the usefulness of research, which is even more ironic, given all of the above context and its irrelevance to the thread topic.

And still we're here, several pages into a very heated thread, and no-one has yet made much of a fist at a convincing explanation of why PPR's should be treated different from almost all other types of asset, to the extent of being completely untouchable.


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## jjm (5 Aug 2017)

torblednam said:
			
		

> And still we're here, several pages into a very heated thread, and no-one has yet made much of a fist at a convincing explanation of why PPR's should be treated different from almost all other types of asset, to the extent of being completely untouchable.



We already have a new tax on PPR's it is called water charges Revenue don't want it they are sending it back to us ,  torblednam it met all of your arguments about being lawful and  so on since the government were forced to put it back in the books it would be possible for Revenue to collect we do not need another new tax after costing a small fortune to set up the last new tax on PPR's ,We need to question have these officials anything better to do with there time looks like the state has away more tax than they require when they pay for people to waste taxpayers  hard earned money,


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## torblednam (5 Aug 2017)

jjm said:


> We already have a new tax on PPR's it is called water charges Revenue don't want it they are sending it back to us ,  torblednam it met all of your arguments about being lawful and  so on since the government were forced to put it back in the books it would be possible for Revenue to collect we do not need another new tax after costing a small fortune to set up the last new tax on PPR's ,We need to question have these officials anything better to do with there time looks like the state has away more tax than they require when they pay for people to waste taxpayers  hard earned money,



What does water charges have to with taxes or Revenue jj?


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## odyssey06 (5 Aug 2017)

torblednam said:


> And still we're here, several pages into a very heated thread, and no-one has yet made much of a fist at a convincing explanation of why PPR's should be treated different from almost all other types of asset, to the extent of being completely untouchable.



Well actually that's not what the thread is about.
It's titled "CGT exemption on family home at risk in the Budget."
The unique nature of PPRs is only one of the topics that the discussion of that title has led to.
I have not read a convincing explanation of why the isolated removal of the CGT exemption is a good idea (either at the level of fiscal policy or pure politics) which is its primary topic.

No one is able to come up with a convincing definition of pornography.
And yet, we seem to able to recognise it when we see it.
We're humans.

And housing is a basic human right. So much so that if you do not have a house the state will step in and provide you with accomodation.
Just as we expect the health sector to be treated differently to say, gyms.

Therefore people expect PPRs to be treated differently to other types of assets, especially commercial ones. That doesn't mean it is untouchable, after all, we have property taxes, but it does mean that anyone with any understanding of human nature should appreciate they will be met with a different response when it comes to one's home versus other assets. That there is a much higher threshold of justification we expect when it comes to the government interfering in PPRs versus other assets.


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## jjm (5 Aug 2017)

torblednam said:


> What does water charges have to with taxes or Revenue jj?



The money spent to run Irish Water is now collected from taxpayers to the best of my knowlage Revenue collect our tax and by the way do a good job,


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## torblednam (5 Aug 2017)

odyssey06 said:


> Well actually that's not what the thead is about.
> It's titled "CGT exemption on family home at risk in the Budget."
> That is one of the topics that the discussion of that title has led to.
> 
> ...



OK we're back on track!

So, in your view would a hypothetical tax at somewhere between 20% - 33% on GAINS in excess of 250k per individual owner (i.e. 500k for a couple) on disposal of a PPR, interfere unduly with the human rights of the disponers?


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## odyssey06 (5 Aug 2017)

torblednam said:


> OK we're back on track!
> So, in your view would a hypothetical tax at somewhere between 20% - 33% on GAINS in excess of 250k per individual owner (i.e. 500k for a couple) on disposal of a PPR, interfere unduly with the human rights of the disposers?



It would interfere with their rights... So, there has to be a compelling reason and justification for the government to intervene, taking into account the interventions (i.e. property tax) which the government has already made with these rights.

I don't consider "_well we have CGT on other assets_" to be a compelling reason.
Or "_we can always do with more tax_" to be a compelling reason either.

Remember earlier in the thread I have said it would be reasonable for the government to seek clawback from GAINS for support they have given to the property owner (e.g. mortgage interest relief, first time buyers grant). But the clawback must be to the value of the level of support given.

Property tax was introduced to fund 'essential' local services, and one of the  justifications for taxing PPRs in this way was to avoid the fluctuating \ unpredictable nature of transaction based property taxes such as stamp duty or CGT. For a government to then turn around and attempt to take the same asset they would have to have a compelling reason and sound fiscal basis for doing so.
They do not.

We have taxes on property at death. This is justified on the basis of the need for equality in society which it is felt is diminished by allowing significant assets to be passed entire from one generation to the next.
That justification does not apply here - because if the current owners cash out they will still be hit with inheritance taxes when they attempt to pass onto the next generation.

So I can't think of a single compelling reason why the government would be presently justified to further infringe on the rights of PPR owners.


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## Early Riser (5 Aug 2017)

Folks - It is the long weekend of peak holiday season. How about getting into the mood with a competition to re-name this thread?

I'll start off with "The Wormhole of Absurdity" !


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## torblednam (5 Aug 2017)

odyssey06 said:


> It would interfere with their rights... So, there has to be a compelling reason and justification for the government to intervene, taking into account the interventions (i.e. property tax) which the government has already made with these rights.
> 
> Remember earlier in the thread I have said it would be reasonable for the government to seek clawback from GAINS for support they have given to the property owner (e.g. mortgage interest relief, first time buyers grant). But the clawback must be to the value of the level of support given.



As someone who recently availed of the HTB scheme, I disagree. Thanks directly to that scheme, my young family are now in a house and my wife and I fortunate enough to be financially able to continue to grow said family.

Without the scheme we would've had to put numerous things, including trying for another baby, on hold for god knows how long as property prices keep rising. And ultimately we'd have spent more on the house, and a lot more over the term of a mortgage...

I actually struggle to try and place an accurate monetary amount on the true value of that scheme to us, but I'd certainly say it's a multiple of the actual tax rebate involved.

If, sometime in the future, we were in the extremely fortunate position of selling our (most likely unmortgaged by then) house for in excess of 800k, I'd gladly write the cheque for the tax on the excess, we'd still be laughing all the way to the bank.

Now don't mistake me for some kind of lefty, I'm definitely not, but I do believe that the tax burden ought to be borne by those who can best afford it, and that is the wealthy. I very much consider someone in the position of being able to cash >250k out of their PPR to be wealthy enough to share some of that excess with the rest of society. Again, just to stress I'm no socialist, and how taxpayers' money gets (mis)spent is a whole other argument.


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## odyssey06 (5 Aug 2017)

torblednam said:


> If, sometime in the future, we were in the extremely fortunate position of selling our (most likely unmortgaged by then) house for in excess of 800k, I'd gladly write the cheque for the tax on the excess, we'd still be laughing all the way to the bank.



Well I am glad that things have gone well... and we can disagree on the level of clawback the state should be entitled to on the basis of the support directly given.
But I suppose the point I was trying to make more generally is that I think where the state has directly given support, this is a justification for some sort of clawback; and that where a homeowner either did not receive such support - or did not avail of it; that the state is therefore lacking in a basis for claiming from the value of the asset.

Our entire tax system is predicated on the basis of those who can afford to pay the most are taxed the most, and we have one of the most progressive tax systems in the world. But that doesn't mean that every new tax is immediately justifiable just because it is applied to higher levels of wealth.
Especially when (a) the state is already taxing this asset both via property tax and inheritance tax and (b) the tax is a profoundly unreliable source of revenue, which recent Irish history has shown to our cost.


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## jjm (5 Aug 2017)

odyssey06 said:


> Well actually that's not what the thread is about.
> It's titled "CGT exemption on family home at risk in the Budget."
> The unique nature of PPRs is only one of the topics that the discussion of that title has led to.
> I have not read a convincing explanation of why the isolated removal of the CGT exemption is a good idea (either at the level of fiscal policy or pure politics) which is its primary topic.
> ...



the government took over 2 billion out of private pension funds people did not like it but put up with it ,the take 41% i think on intrest earned we put up with it they put USC on unearned income we put up with it .I could go on and on

Some people don't understand Because they may have secure employment and the like I would put these people who came up with the above idea in this group,

Then there are others who may have left them self and there families short to put a roof over there family head it was not an Investment it was a sacerfice  Made by the whole family in lots of families there childern helped out at paying the mortage .I will leave it to others to explain better but  i think you get my gest

Investments are some thing you do with spare cash and you do not look at it the same way. I myself are up near retirement so my pension pot is large in the years when we had the pension levy the government took more out than both myself and company put in each year meaning if i had a Defined benefit scheme which Lucky for me I don't have would mean there was nothing being added in these years  the Government took it all and more  it could yet affect people retiring in years to come again you put up with it.

Most family homes now with there morgage paid off paid up to 20% intrest each year in the eighties and nineties  because of government policy at the time the paid away higher taxes ,any extra hours overtime would have a deduction of around 7.5 % prsi employee 7.5% employer and 60% tax at low incomes,

I hope no poster gets a kicking fit,


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## jjm (5 Aug 2017)

Should we not be looking at what is happening in Europe 27 this is where we need to look at

You see posters looking at is happening in the UK and USA I think we need to change direction and fast if we mess up again and there is a good chance  it will be europe who will be deciding if we sink or swim .I am under the impression they will allow us to sink if we do not control how we spend our taxed  (they were  not in the same corner as the people who had there snouts in the trough all the time  the are still watching by the reports the have issued they are not happy ) , When the came hear the first thing the insisted we do was reform how he spent taxpayers money. Once the left we went back to our old ways

We need to Question what are we going to use the new taxes for I suspect the advisory group are the same people who are allowing us to drift back to our old ways, chances are if the money is left with the family it will be better spent,

When we talk about USA and houses we are not talking about the same thing in the usa people who get into trouble paying for there family home can give back the keys and start again a year later.

IN ireland if you give back the keys you still owe the bank. As i  already said there are people who in the past got help from family and friends so they could hold on to there home and not give back the keys buying a house in Ireland is a liability not an investment for most families


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## odyssey06 (5 Aug 2017)

Aside - we really need to have the 'hand back the keys option' here. 
It might knock some sense into banks before they give out loans.


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## jjm (5 Aug 2017)

odyssey06 said:


> Aside - we really need to have the 'hand back the keys option' here.
> It might knock some sense into banks before they give out loans.



and the government who are tempting people with 20000Euro to take out loans with a very small deposit which means if something goes wrong they are toast it also means banks are correctly in my mind keeping a premium on  rates to allow for some default by people tempted to over reach themselves  before they are ready ,


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## torblednam (5 Aug 2017)

odyssey06 said:


> Our entire tax system is predicated on the basis of those who can afford to pay the most are taxed the most, and we have one of the most progressive tax systems in the world. But that doesn't mean that every new tax is immediately justifiable just because it is applied to higher levels of wealth.
> Especially when (a) the state is already taxing this asset both via property tax and inheritance tax and (b) the tax is a profoundly unreliable source of revenue, which recent Irish history has shown to our cost.



I fully respect your entitlement to your opinion, but the fact that you view capping the value of an exemption as a new tax pretty much means there isn't really any more discussion that you and I can have on this topic, so this will be my last post in response to you as we're only repeating ourselves and I dare say boring other users.

Property tax applies regardless of whether a property is a PPR or not and regardless of whether there is a latent gain or not. It's a form of wealth tax, on the OWNERSHIP of property based on the value of the property. You could start off wealthy, and by choosing not to use your assets productively, end up seeing all of your wealth eroded away by a wealth tax. In other words, don't take it personally, it's not actually a tax on you at all, it's a tax on the property and you only have to pay it because you own the property. You can avoid the tax by not owning a property.

CGT is a tax on individuals (or companies) on their gains.

CAT is also a tax on individuals, on their good fortune. Worth noting there is a credit for CAT of the amount of any CGT paid arising on the transaction giving rise to the CAT liability.

So if Ultan and Saidhbh gift the family home in Foxrock worth 1.2m to Tarquin, they might owe €100k in CGT. Tarquin might owe €300k in CAT and be delighted that Daddy and Mummy will be effectively gifting him the house and paying €100k of his tax liability too...

As for the profound unreliability of the yield from CGT and similar, you should therefore approve of it being pitched at a rate that (by your rationale) has the effect of limiting the yield. Like a recovering addict taking measures to limit their exposure to the gargle... would you disapprove of a rate reduction to 20% which might see the tax take heading into the billions again? (That's a rhetorical question!)


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## jjm (5 Aug 2017)

torblednam said:


> I fully respect your entitlement to your opinion, but the fact that you view capping the value of an exemption as a new tax pretty much means there isn't really any more discussion that you and I can have on this topic, so this will be my last post in response to you as we're only repeating ourselves and I dare say boring other users.
> 
> Property tax applies regardless of whether a property is a PPR or not and regardless of whether there is a latent gain or not. It's a form of wealth tax, on the OWNERSHIP of property based on the value of the property. You could start off wealthy, and by choosing not to use your assets productively, end up seeing all of your wealth eroded away by a wealth tax. In other words, don't take it personally, it's not actually a tax on you at all, it's a tax on the property and you only have to pay it because you own the property. You can avoid the tax by not owning a property.
> 
> ...



They only good thing is the type of government who would bring in what is proposed above would  turn on the same type of people who proposed /support it,


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## Brendan Burgess (5 Aug 2017)

Sorry folks

I have better things to do that review every post and every report of offensive posts on this thread. 

Brendan


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