At present, the family home (principal place of private residence) is exempt from Capital Gains Tax. Some analysts have suggested that this concession is skewed towards the wealthiest in the community, and there is a push to remove this exemption for the most expensive residential properties.
In 2009 a report by the Brotherhood of St. Laurence and the Australian Housing and Urban Research Institute claimed this CGT exemption is worth on average $10,000 a year for the wealthiest 20 per cent of home owners, but worth just $1200 a year for the bottom 20 per cent of households. The suggestion is that it is unfair that those on the highest incomes are getting much more benefit than anyone else.
I predict that the Australian Government will place a cap of about $750,000 on the family home CGT exemption. In other words, only the first $750,000 from the proceeds of sale of the family home would be exempt from CGT. Everything over that sum would incur CGT at the usual rates.
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