Speculators could cash-in on Capital Gains Tax changes – Doherty TD

first_imgSinn Féin Finance Spokesperson Pearse Doherty TD has said the government’s blanket approach on changing the 7 year Capital Gains Tax (CGT) exemption would see certain property speculators net massive tax free windfalls.Budget 2018 saw the reduction of the period over which owners must retain qualifying assets to enjoy full relief from capital gains tax from seven to four years.Deputy Doherty said the announced measures would have no impact on land hoarding or housing supply. He said the approach taken was too broad and needed to be narrowed so that it only applies to zoned land ready for development. He said the real issue is the 5 year Dividend Withholding Tax vulture funds can avail of.Teachta Doherty said: “The move to change the number of years an individual must hold land before it can be sold CGT free from 7 to 4 would be a very expensive move that benefit certain property speculators who bought property and land, with no impact on land hoarding.“While there is merit in the change in relation to land that is zoned there is absolutely no justification for a broader change encompassing all land and property.“Sinn Féin will argue strongly in the Finance Bill that the change be limited to land with residential potential so that certain property speculators don’t receive massive untaxed windfalls. “However, even if this approach was adopted the move would still be missing the wood for the trees.“There has been much commentary on NAMA’s bulk sales in recent weeks and its impact on land hoarding and housing supply.“When we look closely at the figures though we see that 80% of this NAMA land was sold either before or after the period to which the 7 year rule applied and most of it was sold to vulture funds that don’t pay CGT anyway.“So it is not this 7 year exemption that is the main driver of land hoarding.“The real issue is the exemption from the 20% Dividend Withholding Tax that vulture funds pay if they hold land for 5 years or more. “This change was brought in last year and internal Department of Finance documents show concerns that it would clog up the market.“It is this exemption which must be ended. Allowing certain property speculators profiteer by changing the 7 year CGT rule will have no impact.“The 5 year rule that has incentivised vulture funds to hold on to land until 2020, 2021 and 2022 so that they can sell off tax free. This is where the focus of those of us who wish to tackle land hoarding and supply bottlenecks must be.”Speculators could cash-in on Capital Gains Tax changes – Doherty TD was last modified: October 11th, 2017 by Rachel McLaughlinShare this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to share on Skype (Opens in new window)Click to print (Opens in new window)Tags:budget 2018capital gains taxPearse DohertypropertySinn Feinlast_img

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