Tax Break for Wealthy to Go

With analysis due to be released, showing that concession is skewed towards the wealthiest in the community, there will be a fresh push made to remove capital gains tax exemptions for the most expensive residential properties.

The Australian has reported that a report by the Brotherhood of St. Laurence and the Australian Housing and Urban Research Institute shows the CGT exemption is worth on average $10,000 a year for the wealthiest 20 per cent of home owners.

In contrast it is worth just $1200 a year for the bottom 20 per cent of households.

Government is urged to remove Capital Gains Tax exemption

The Brotherhood of St. Laurence executive director Tony Nicholson said it made no sense that those on the highest incomes were getting much more benefit than anyone else.

Tony Nicholson also stated that it was unfair that the tax concessions on owner occupied housing was unfair, and wasteful and actually help put home ownership out of reach for many Australians and are in dire need of reform.

The Federal Government urgently needs to remove the capital gains tax exemption on homes worth more than $1.1 million, which at roughly 2 per cent of all owner-occupied dwellings is at the very top end of the property market.

Wayne Swan has strongly denied that the government was considering a move to remove capital gains tax exemptions on homes valued at more than $2 million.

A report by University of Sydney Associate Professor Judith Yates has shown that the current system is poorly targeted, providing the most support to established home owners and young people trying to get into the housing market.

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Published on September 9-th, 2009 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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