As far as I know the PPOR is exempt from CGT on death only if the person who inherits actually lives there afterwards. For the PPOR only, you can get around that by selling just before you die and leaving cash. For other assets this doesn't work either.
Majors are not necessarily running the show, but that just makes it even harder to get something like DDs through. There will always be enough of the cross-benches crowd who will see a great opportunity to curry favour by blocking it. At any rate, you can be sure that if one major proposes it the other will automatically oppose it. It is a dead letter because it is just an incredibly unpopular concept. The vast majority of Australians are now hoping to either inherit or pass on some amount of wealth. It is no longer 1950 or 1933.
I also oppose DD on the basis that it forms a huge disincentive to capital formation and the long-term accrual of small gains, both of which are important to the economy, but that is another story.
But it's a realistic topic it's a fact that most of us will be living longer, it's going to affect not just housing stuff but the socio, ethical, & economics for every generation.
Blondie I agree it IS the main issue we have to deal with, however any possible solutions you might offer here will be met mostly with vile and disgust by those who offer none.
Noooooooooooooooooo That's would not be beneficial for my situation. obviously you don't get involved with trust stuff.
LoL.
I will probably one day be the indirect beneficiary of a family trust, but that is by the by. But to some extent your response proves my point that, whatever the problem is that could be solved/ameliorated by death duties, it could also be fixed just as well through tweaking of CGT. So why bother even starting the conversation?
BTW I am sure that if the world changed and you were given some time to think about it, you and your family could optimise away from family trusts. Changing taxation rules rarely has the impact that its proponents predict, because people are smarter than they are given credit for and they change their behaviour. If you cause the behaviour to change in a way that is bad for the economy (which I believe DDs certainly would) then you have stuffed up doubly.
BTW I am a solid supporter of stable population because I think it would provide the best result for the people in future generations. Since I derive over half of my income from property investment, stable population would definitely be very detrimental to my current business model (I estimate 200 basis points of my annual economic return is due to population growth and that is very significant). So what. If stable population ever looks like becoming a reality I will change my business model and be happy. If your environment is piss, you swim. If it turns to shit, you put on your wellies and walk. I have no sympathy whatsoever for people who just complain and do nothing to improve their own lot. They starve and die, and that is evolution, and that is a good thing in my book.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Paul I've got elderly parents who have done very very well in property, & they don't wish to be a burden on the rest of my family & I ..however, they have the financial means to choose to live their days NOT in a retirement village or nursing home but in the comfort of their own home. My job now is to honor thoses wishes, whilst my Mother is still healthy she cares for my Father if the crunch comes that she is no longer able to assist my Father, I will employ carers to support them. I don't want them in shitty regimented elderly institution where there is no dignity
My dilemma will be if mum goes before dad he will be so lost & tormented & he will give up mentally (he has dementia & cardiac issues & prostate cancer, ( we are not involving the big guns treatment due to his age(89).
They are very proud people who never like even asking my siblings & I for help, I even had a drama to get mums ok to get a cleaner to help clean their home.
What do you do with people like that who had no help with their housing stuff, no baby bonus, or FTB part A or B. they are financially self sufficient?
As I mentioned in another thread their PPOR is going to be downsized, their block will be subdivided, & they will be moving from a unsustainable 2 storey home to a less bone breaking single storey . They want to stay in their riverside suburb that has been their home since 1986. I'm not sure what's viable if we rent or sell up the 2storey...will have to work it out with the others & brainstorm.
miw
4 Sep 2014, 06:16 PM
LoL.
I will probably one day be the indirect beneficiary of a family trust, but that is by the by. But to some extent your response proves my point that, whatever the problem is that could be solved/ameliorated by death duties, it could also be fixed just as well through tweaking of CGT. So why bother even starting the conversation?
BTW I am sure that if the world changed and you were given some time to think about it, you and your family could optimise away from family trusts. Changing taxation rules rarely has the impact that its proponents predict, because people are smarter than they are given credit for and they change their behaviour. If you cause the behaviour to change in a way that is bad for the economy (which I believe DDs certainly would) then you have stuffed up doubly.
BTW I am a solid supporter of stable population because I think it would provide the best result for the people in future generations. Since I derive over half of my income from property investment, stable population would definitely be very detrimental to my current business model (I estimate 200 basis points of my annual economic return is due to population growth and that is very significant). So what. If stable population ever looks like becoming a reality I will change my business model and be happy. If your environment is piss, you swim. If it turns to shit, you put on your wellies and walk. I have no sympathy whatsoever for people who just complain and do nothing to improve their own lot. They starve and die, and that is evolution, and that is a good thing in my book.
Scruples hon scruples. :p
As the saying goes "you make your own luck"
But one still needs to honor those who have provided them well.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
I stand corrected. Obviously the hearsay I heard was wrong.
But you could still "fix" that by changing CGT without need to resort to death duties.
BTW, while I am opposed to any means test for pensions because I see them as everyone's birthright once they retire, I do think that if you have to have an asset test, then the PPOR should be included in that asset test. The existence of reverse mortgages means there is just no excuse to be treating people differently based on the form their assets take. A person with a $1M house and $100k cash is just as rich as a person with a $100k house and $1M cash and should be treated identically. And granny does not need to be kicked out of her house.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Blondie While you story seems quite real, the bottom line is that "I've got elderly parents who have done very very well in property" they have done so at the expense of the next generations. Their gains are directly at the cost of the young.
Please do not take this the wrong way as I do see that your story is very real to you and your family and your family principals seem very solid indeed and for that I applaud you and your family, but do they get any pension? What is the approx value of their PPOR?
Making substantial wealth through residential property is really not a good thing for an advanced society like ours, as it is the next generations who bear the cost of that wealth acquisition.
The thinking and the system is broken. If I told you a story about a couple who stared many businesses, employed many people and have great exports during their working lives and became very wealthy and had $5 million in shares and cash, but rented as they moved around a bit, why should they get no pension, compared to a couple who speculated on property and did nothing to create any real GDP or benefits to society at large and lived in a $5 million home and got the full pension?
The issues are complex as your story clearly highlights. I am in no way saying that your parents did not have good intentions at all. They probably were doing as they were encouraged to do by society and gov'ts of the day, and I do wish them all the best.
miw
4 Sep 2014, 06:27 PM
I stand corrected. Obviously the hearsay I heard was wrong.
But you could still "fix" that by changing CGT without need to resort to death duties.
BTW, while I am opposed to any means test for pensions because I see them as everyone's birthright once they retire, I do think that if you have to have an asset test, then the PPOR should be included in that asset test. The existence of reverse mortgages means there is just no excuse to be treating people differently based on the form their assets take. A person with a $1M house and $100k cash is just as rich as a person with a $100k house and $1M cash and should be treated identically. And granny does not need to be kicked out of her house.
MIW Good on you for learning and thinking. Great work....
No means test for a pension would mean that you are happy to pay Gina or Clive a full pension?
It is an interesting thought and I will ponder on it.
I am not sure any welfare is actually a birth right (even though Herbs will say I certainly would as a socialist...lol) Welfare should be a safety net only, to those who need it most. Simple as that.
Good on you for learning and thinking. Great work....
No means test for a pension would mean that you are happy to pay Gina or Clive a full pension?
It is an interesting thought and I will ponder on it.
I am not sure any welfare is actually a birth right (even though Herbs will say I certainly would as a socialist...lol) Welfare should be a safety net only, to those who need it most. Simple as that.
Yes. I would be very happy to pay Gina and Clive full pensions - once they retire which I expect they won't do until they are much older than the average retiree. I do not think of the pension as welfare. It is earned. As such it should also be taxable income for those who receive it.
But more pragmatically, if everyone got the pension, we could scale back on this superannuation guarantee madness which is turning out to be more expensive than pensions ever were.
I also see allowing everybody to retire in dignity as being way more important than making sure fat rich people get nuthin', which is just a purely negative goal in my view.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Socialism doesn't work Pork - So we can give it away as a VERY bad idea.
As to the thought old people might have been advantaged by having been born before young people and living through a lifetime of seeing central banks inflate asset prices, it would seem rather obvious to me that central banks aren't about to change their ways, and as such, young people are about to get their turn 'enjoying' this particular little happenstance too.
Though whilst potentially being rather better informed about the fact that this is how the world works (via the internet 'n whatever) than most of us oldies were as we lived through it. And as such, bitching about it loudly and often in ways us old farts didn't, because we never truly understood how it worked - As opposed to the young farts who do; And as such are a bit better positioned re framing their potential moves/responses going forward than us old farts were - Again, IMO.
PS: Death Tax - If the system can't figure out how to bleed a dude of enough tax before he croaks, so feels it needs to line up for another crack after he has, then the system is a TOTAL fuckup 'n it can fuck orrf - For mine.
Herbs We have a socialist democracy, Public health, free education, welfare etc, is a socialist creation.
I know Socialism is a fuckup - That's been proved. And I'm not actually a confirmed committed believer in Democracy - Truth be told, it's probably a fuckup too. But that's not been proved - Not yet anyway. So I'll just settle for telling the younger members of my family to keep an eye on it - Until it is proved; For now; Going forward. So they can ultimately determine for themselves if the Socialist Democracy way is a TOTAL fuckup; As opposed to only being a HALF a TOTAL fuckup. But it's NOT looking good - IMO.
I know Socialism is a fuckup - That's been proved. And I'm not actually a confirmed committed believer in Democracy - Truth be told, it's probably a fuckup too. But that's not been proved - Not yet anyway. So I'll just settle for telling the younger members of my family to keep an eye on it - Until it is proved; For now; Going forward. So they can ultimately determine for themselves if the Socialist Democracy way is a TOTAL fuckup; As opposed to only being a HALF a TOTAL fuckup. (But it's NOT looking good - IMO.)
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