Saturday 17 March 2018

Varadkar rules out controversial proposal to tax sale of family homes after backlash

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Charlie Weston

Charlie Weston

Taoiseach Leo Varadkar has firmly ruled out any move to tax the sale of family homes. The proposals from Department of Finance officials had being greeted with a massive backlash.

Financial experts said the opposition to the suggestion of taxing home sales was so strong it would bring people on to the streets in a show of force not seen since the water protests.

But Mr Varadkar told the Irish Independent: "The Government has no plans or intentions to change the rules which exempt the proceeds of the sale of a family home from capital gains tax."

His officials were keen to stress the proposal comes from a discussion paper setting out options, and designed to generate debate ahead of October's Budget.

But there is no firm proposal to lift the exemption that means capital gains tax does not apply when a family sells its home while the owners are still alive.

Mr Varadkar's intervention comes after Age Action, the Irish Citizens Parliament, accountancy bodies, and a range of farmer representative groups voiced trenchant opposition to the proposal.

Fianna Fáil's finance spokesman Michael McGrath also said his party would not be supporting any move to tax family homes when they are sold.

The Government depends on the support of Fianna Fáil to remain in power.

If the proposal was to be implemented, it would mean a family moving to a larger home or elderly people downsizing would be hit with huge capital gains taxes.

Read More: Tax cuts, hikes in child benefit and pensions on Leo's budget 'menu'

A family that originally bought a home for €300,000 years ago may now have a property valued at €500,000.

This would mean a gain of €200,000.

If that family decided to sell up to move to another home they would be forced to pay capital gains tax of €66,000 on the gain in value on their home.

This would mean less money to fund a new home.

For 'empty nesters' moving from a large home to a smaller one, the imposition of the tax would mean their savings for their old age would be damaged.

Chairman of the mortgage committee of the Irish Brokers Association Michael Dowling said people were enraged at the suggestion that the sale of the family home could be taxed.

"Taxing the sale of family homes will be very difficult. It will affect older people in particular," he said.

"People will take to the streets, as was the case for water charges and the move to take medical cards off the elderly."

Justin Moran, head of advocacy and communications at Age Action, said older people are furious at any suggestion that if they were to sell their home they will have more tax to pay. They are mostly on small fixed incomes, he said.

Irish Independent

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