You’re already taxed on the family home capital gains, it’s called rates. Every time your home and property value increases, so does the tax... Er rates.
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You’re already taxed on the family home capital gains, it’s called rates. Every time your home and property value increases, so does the tax... Er rates.
That is also the case with other real estate - land, residential, commercial, farms, lifestyle blocks. Except that the main reason rates rise is that councils keep increasing rates above inflation. Otherwise, rate rises due to changes in value tend to be relative rather than absolute.
Rates are payments for council services - i.e. the beloved user pays. Landlords recover their rate expense through the rent that they charge their tenants. In Auckland there is a uniform general charge element to rates. That means part of the rate is the same whether the value is $500,000 or $5m. There can also be a targeted rate for amenities in the property’s neighbourhood.
We are talking about central government taxes. Not the payment for council services.
The only thing you’ll find when you dig deep into the process is that the rates tax is determined at local council level so there are differing approaches but the one thing common is a boffin with a spreadsheet that determines what your next tax rates rise will be and it’s directly correlated to QV. I contest every single rates rise and have every single one of them over turned by an on site valuation, always resulting in a lower valuation and a lower rates tax. Dig deep and you’ll find out how flawed the system really is. In any event it’s a tax on capital and increase in capital assessed, therefore it is a capital gains tax!
Im not suggesting a business ought be subject to CGT but for a start there are all sorts of tax breaks for a business (deductables, R&D credits when they are in vogue etc) that houses dont get during the lifetime and the whole point of a business is to make money so if CGT tax were implemented it seems a very different beast to a home which is, in the first instance, a place to live. One of the key elements of thingy's hierarchy of needs. Quite why you want to tax an owner occupied house for the sake of being a house, what it is you're trying to achieve, I cant see.