Re: Capital Gains Tax

Postby Slim on Tue 12/Jul/11 1:04pm

Henry Dorset Case wrote:
E Dogg Capizzle wrote:
thorg wrote:So each person is allowed a primary residence? or each 'family' is allowed a primary residence? How is primary residence defined? how is family defined? Can I allocate a home to which I only spend 10% of my time as my primary residence? What if I spend the rest of my time travelling? - Just too many loopholes.

So all a property developer needs to do is live in a house as primary residence (whilst developing it) and is immune from CGT? Can they do this once over year? twice? twelve? How do you tell who is a property developer and who just likes moving a lot?


Maybe you should investigate this stuff? Relying on your ignorance of how these issues are resolved doesn't make for a particularly convincing argumentative strategy. :eh:


the revenue already have all the powers they need to penalise this stuff. one of my friends is a tax accountant and this is his bread and butter work. well, brioche and butterscotch sauce....


Wouldn't his work be around avoiding paying it? Which from my understanding is relatively easy to argue, making the current law difficult to inforce.
Slim
Member for: 16 years 1 month

Re: Capital Gains Tax

Postby happybaboon on Tue 12/Jul/11 1:14pm

Ah, so the laws are already here.... They just need to enforce it more and have a better public profile. Perhaps a reality TV show of the SFO investigating financial crimes in action is required. It could screen between Police 10-7 and the show about car crash investigations.
happybaboon
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Re: Capital Gains Tax

Postby thorg on Tue 12/Jul/11 1:53pm

Henry Dorset Case wrote:
E Dogg Capizzle wrote:
thorg wrote:So each person is allowed a primary residence? or each 'family' is allowed a primary residence? How is primary residence defined? how is family defined? Can I allocate a home to which I only spend 10% of my time as my primary residence? What if I spend the rest of my time travelling? - Just too many loopholes.

So all a property developer needs to do is live in a house as primary residence (whilst developing it) and is immune from CGT? Can they do this once over year? twice? twelve? How do you tell who is a property developer and who just likes moving a lot?


Maybe you should investigate this stuff? Relying on your ignorance of how these issues are resolved doesn't make for a particularly convincing argumentative strategy. :eh:


the revenue already have all the powers they need to penalise this stuff. one of my friends is a tax accountant and this is his bread and butter work. well, brioche and butterscotch sauce....
and here was me thinking we were talking hypothetically about how the labia CGT might unfold, and all the time we were actually discussing the way it is right now :rolleyes:
thorg
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Re: Capital Gains Tax

Postby philstar on Tue 12/Jul/11 1:55pm

ThingOne wrote:You dont want to get the situation where someone lives in their house for 40 years, trades down to buy an smaller property in retirement and gets stung with a a HUGE bill for CGT where in reality they are no better off as ALL houses increased in value during this period so I dont see why they should have pay tax on that.

Hence the family home should always be excluded.


why?

lets look at the figures if you buy a house for 100k and sell it for $1.497M (7%pa growth ) 40 years later you have made $1.4M 15% tax on that would be $210K. if you buy another house that was half the that cost you $750K you have $510K in cash and a house. You stile made money and should pay tax on it.

why should you not have to pay tax on it?
philstar
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"misanthropic"
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Re: Capital Gains Tax

Postby ThingOne on Tue 12/Jul/11 2:09pm

philstar wrote:
ThingOne wrote:You dont want to get the situation where someone lives in their house for 40 years, trades down to buy an smaller property in retirement and gets stung with a a HUGE bill for CGT where in reality they are no better off as ALL houses increased in value during this period so I dont see why they should have pay tax on that.

Hence the family home should always be excluded.


why?

lets look at the figures if you buy a house for 100k and sell it for $1.497M (7%pa growth ) 40 years later you have made $1.4M 15% tax on that would be $210K. if you buy another house that was half the that cost you $750K you have $510K in cash and a house. You stile made money and should pay tax on it.

why should you not have to pay tax on it?


What if you bought a house for exactly the same price?.

I dont see any need for a CGT on your primary residence, ie your house, its my home not an investment, if it increases in value that is completly out of my control.
And as you always need somewhereto live I feel your home is different than other types of property bought purely for investment return/capital gain.
ThingOne
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Re: Capital Gains Tax

Postby Spyder on Tue 12/Jul/11 2:22pm

philstar wrote:
ThingOne wrote:You dont want to get the situation where someone lives in their house for 40 years, trades down to buy an smaller property in retirement and gets stung with a a HUGE bill for CGT where in reality they are no better off as ALL houses increased in value during this period so I dont see why they should have pay tax on that.

Hence the family home should always be excluded.


why?

lets look at the figures if you buy a house for 100k and sell it for $1.497M (7%pa growth ) 40 years later you have made $1.4M 15% tax on that would be $210K. if you buy another house that was half the that cost you $750K you have $510K in cash and a house. You stile made money and should pay tax on it.

why should you not have to pay tax on it?


At a minimum you have to take inflation out of the capital gains. According to the inflation calculator, $100k in 4Q1971 is $1,252k in 4Q2011, so the capital gain on that property is only $247k. Taxed at 15% that's "only" 37k which isn't going to make a gubbermint rich and there aren't too many people who hold onto their houses for 40 years (my parents excluded). And as has been said many times, you need to be able to capitalise losses, so my parents house which cost $100k in 1971, and doesn't have an RV anywhere near that, can write off around $200k against future tax??
Spyder
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Re: Capital Gains Tax

Postby Wobbler on Tue 12/Jul/11 2:31pm

Ban residential rental properties

problem solved
Wobbler
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Re: Capital Gains Tax

Postby ThingOne on Tue 12/Jul/11 2:46pm

Wobbler wrote:Ban residential rental properties

problem solved


Have to live in govt supplied trailer parks till you can afford your own home.
ThingOne
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Re: Capital Gains Tax

Postby Wobbler on Tue 12/Jul/11 2:54pm

ThingOne wrote:
Wobbler wrote:Ban residential rental properties

problem solved


Have to live in govt supplied trailer parks till you can afford your own home.


Sounds good, the chch lot are being built at the moment
Wobbler
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Re: Capital Gains Tax

Postby slumdog on Tue 12/Jul/11 3:55pm

way_downsouth wrote:
wheeltowheel wrote:
way_downsouth wrote:As for the Government holding them, well, would we rather have more Schools/Prisons/Hospitals/insert what you want here or the assets or more tax.


Why not assets and more tax and more [insert what you want here]?

Why not get everything pulling together instead of cutting off our noses to spite our faces, so to speak?


The point still stands. The assets could be sold to provide other services.


That's bullshit, the income from the assets can be used to provide for those services in perpetuity. Selling them now nets $8b and can only be invested once for one or two or three years schools/prisons/hospitals expenses, but owning them for another 100 years nets what, $800b? think about it.
slumdog
Member for: 9 years 3 months

Re: Capital Gains Tax

Postby slumdog on Tue 12/Jul/11 3:59pm

ThingOne wrote:The risk of putting your money just into a nice safe bank, is the risk of inflation, nice safe banks are not the place for long term retirement savings.


Hmm, yes, but if you are 65 and you make it to 100 say, you can erode all that capital before you kark it at $28,000 a year including interest.

If you own your house, that should be an ok wage to get you by?

AND you can be (more) sure you will not lose it. Sure, you won't make money on your money, but you will be able to live. Just tell the kids to look after themselves, plus they'll have your personal home to sell..
slumdog
Member for: 9 years 3 months

Re: Capital Gains Tax

Postby slumdog on Tue 12/Jul/11 4:05pm

ThingOne wrote:
philstar wrote:
ThingOne wrote:You dont want to get the situation where someone lives in their house for 40 years, trades down to buy an smaller property in retirement and gets stung with a a HUGE bill for CGT where in reality they are no better off as ALL houses increased in value during this period so I dont see why they should have pay tax on that.

Hence the family home should always be excluded.


why?

lets look at the figures if you buy a house for 100k and sell it for $1.497M (7%pa growth ) 40 years later you have made $1.4M 15% tax on that would be $210K. if you buy another house that was half the that cost you $750K you have $510K in cash and a house. You stile made money and should pay tax on it.

why should you not have to pay tax on it?


What if you bought a house for exactly the same price?.

I dont see any need for a CGT on your primary residence, ie your house, its my home not an investment, if it increases in value that is completly out of my control.
And as you always need somewhereto live I feel your home is different than other types of property bought purely for investment return/capital gain.


The CGT bill comes out of the profit only remember, they will still have 85% (say) of the profit from the sale.

I did hear an interesting arguement against the excluson for personal homes. Evidently this encourages active investment in your home, i.e. you don't invest in other types of investment, you pump the money into buying as big and flash a house for your personal home as possible,because the gain is tax free.

Not saying i agree with the arguement against the exclusion, but it is a compelling idea, and bad news for the sharemarket/property prices increasing/ business investmet etc.
slumdog
Member for: 9 years 3 months

Re: Capital Gains Tax

Postby ThingOne on Tue 12/Jul/11 4:10pm

slumdog wrote:
ThingOne wrote:The risk of putting your money just into a nice safe bank, is the risk of inflation, nice safe banks are not the place for long term retirement savings.


Hmm, yes, but if you are 65 and you make it to 100 say, you can erode all that capital before you kark it at $28,000 a year including interest.

If you own your house, that should be an ok wage to get you by?

AND you can be (more) sure you will not lose it. Sure, you won't make money on your money, but you will be able to live. Just tell the kids to look after themselves, plus they'll have your personal home to sell..


Still wont work, after 20 years (Age 85) your $28k will need to be $65k to have the same spending power, assuming annual inflation of 3.5%
After 30 years (age 95) you would need to have $113k per annum to have the same spending power as $28k now, your $28k when you are 90 will probably buy you a nice TV set.

Inflations a bitch.


Ibased those figues off the Reserve bank actual inflation figures from 1981 till 2011 (4.8% annual inflation)
ThingOne
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Re: Capital Gains Tax

Postby philstar on Tue 12/Jul/11 4:19pm

ThingOne wrote:What if you bought a house for exactly the same price?.


well you are then in the same position as a first home buyer, and disadvantaged by house price rises. i still don't think that somehow justifies not paying tax on profits you make.
philstar
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"misanthropic"
Member for: 13 years 6 months

Re: Capital Gains Tax

Postby philstar on Tue 12/Jul/11 4:21pm

Spyder wrote:At a minimum you have to take inflation out of the capital gains.


why they don't do it on term deposits ( even though I think the should).
philstar
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"misanthropic"
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