One could ask why there should be capital gains on the sale of the family home. There are lots of reasons why not.
The question arises amid the ‘Silly Season’ suggestion that the Government could levy capital gains tax on the sale of the family home.
The home owner has done the Government a favour.
The owner has taken on the responsibility for providing a home for the family and saving the Government from having to do so. The home was built or purchased from after-tax income. If that was not enough, the owner has to pay Vat to buy fixtures and fittings to furnish the home.
A decade ago, the owner would have incurred a sizeable wedge of stamp duty of up to 9%. House prices were going through the roof, people were rushing to buy, and the Government was tapping vast tax revenues from the transactions.
Government spending was predicated on the stamp duty receipts boom lasting forever. As a former finance minister once said: “When I have money, I spend it.”
The Government did just that. So-called pay benchmarking for the public sector was just another symptom of the Government’s largesse and we know how all that ended. It is part of the reason that so many people are still in negative equity.
Then there are the thousands of people who are homeless or needing
A large proportion of those who are homeless are young children, a shameful phenomenon. The demand for the Government to build social housing has stepped up.
The Government will just have to find innovative ways of funding these properties. The private sector appears to have no interest unless the Government once again makes it worth its while. And as we all know, that simply exacerbates an already difficult problem.
Junior jobs minister John Halligan has said he wants tax breaks for middle-income earners on the basis that those people are the ones “feeding the economy”.
Robbing those who have worked, scrimped and saved all of their lives while they paid inflated prices for homes and funded their children’s education is just not on.
Surprising, many commentators appear to have forgotten that there already is a tax on the family home — it’s called the Local Property Tax. Those bills have been frozen but will be reviewed in the coming years.
People should not be gouged again when they sell their home.
© Irish Examiner Ltd. All rights reserved