CGT exemptions vital for owner occupiers
Calls to apply Capital Gains Tax to the family home would dampen sales of existing dwellings, stifle renovations and moderate the numbers of new homes built for owner occupiers.
Removing the CGT exemption for the family home would add a significant cost to moving (locking people into their current home), reduce renovations activity and reduce new dwelling construction.
“Existing homeowners would be penalised for moving under this proposal, which would force them to stay in homes. This unnecessarily impacts older Australians who are looking at downsizing,” said Executive Director Residential Nick Proud.
“Removing CGT exemptions on the principal place of residence would penalise average families who will receive a significant CGT bill for any improvement in home values if they were to sell.
“Renovations that improve the capital value on the family home, which are vital for the modernisation and more sustainable effective use of housing, would be less likely under this proposal.
“Owner occupier homes make up two thirds of the 9 million homes in Australia today and the family home is generally the savings base for retirement. This proposal would unfairly impact on people’s futures.
“Removing the CGT exemption on the family home would also see capital transfer into other tax favourable investments, such as shares, reducing housing availability, supply and affordability.
“The record pipeline of new homes for home buyers is finally translating to pockets of greater affordability, however removing CGT would impede new home delivery and turnover, having unintended consequences if introduced.