Plan to tax profits from sale of home could put FF back into government

I HAD intended voting for Fine Gael in the upcoming general election, but a recent proposal from Michael Noonan and Richard Bruton has scared the living daylights out of me.

They are proposing that if Fine Gael get into government they will tax profits on the sale of a family home by a staggering 7.5%, up from 0%.

Anyone over 50 who bought their house before the boom will be hit for a ferocious amount of tax if they want to downgrade, upgrade or if they just want to move to a different location.

This would also have a stagnation effect on house sales as nobody would want to sell their house and lose that amount of money, nor could they afford to do so. For example, the average price of a house in Dublin 25 years ago was about IR£25,000, (approximately €31,500). I estimate that it could now be worth about €295,000. If the owner wanted to downgrade to a smaller house in order to have a small bit of extra cash to spend in their senior years, under Fine Gael’s proposal the seller would be hit with a massive tax of about €20,000. All the extra money that they would save by downgrading would be gone on tax.

When you take inflation into account, the €31,500 that was paid for the house 25 years ago was probably equal to two hundred thousand euro in today’s money. And, if a person is selling a house that they bought 20 years ago, they will usually have to buy another house at today’s prices.

I wrote to Michael Noonan and Richard Bruton about this and they have both confirmed that if in government, they will be taxing profits on the sale of a family home, because cash was “available” to the home owner. Another example of taking away the small amount of savings that a poor or elderly person would have built up in their family home over many years, and letting the rich off scot free.

Proposals like this could put Fianna Fáil back into government. What a horrible thought. The current government were proposing a property tax, starting at €100 per annum increasing to a maximum of €200 per annum. I think no one would object to that small amount and it would bring in every bit as much, if not more money, as everyone with a house would be paying it and it would not affect house sales in any way.

Martin Heneghan

Fairview

Dublin 3