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Australia Institute Proposes Capital Gains Tax On Home Worth More Than $2 Million

The Australia Institute says capital gains tax exemptions on homes worth over $2 million are costing the federal budget billions of dollars.

Capital gains tax is not payable on the sale of the main residence. The Treasury says this costs the budget $46 billion each financial year.

The Australia Institute report proposes scaling back capital gains tax exemptions for homes worth more than $2 million. It says this would raise $12 billion over four years.

The Institute, a progressive think tank, says the proposal should be considered because it costs more than the federal government spends on defence ($26.3bn), education ($31.9bn) or Medicare ($21.1bn).

The report was prepared by the institute’s senior economist, Matt Grudnoff.

The report is shown below. It can be expanded and downloaded.

16-01-11_cgt-main-residence-exemption_tai


Historic Deal Between Coalition and Labor on Business Tax

An historic deal was announced tonight between the Labor Opposition and the Liberal-National Party government to pass business tax reforms.

The deal will see the Capital Gains Tax halved and the Company Tax Rate reduced to 30%. Other measures include capital gains tax concessions for venture capital and a crackdown on the use of tax shelters and general tax avoidance.

The agreement follows the Opposition’s support earlier this week for the government’s Medicare levy increase to pay for Australian troops in East Timor and agreement on the handling of refugee boat people.