What’s the next target? Taxing expensive homes?

Now that the PM and Treasurer are going after super, what’s to stop them from slapping capital gains tax on the sale of ‘expensive’ family homes?

What will our dynamic duo target next? The single most obvious would be to slap the capital gains tax on the sale of ‘expensive’ family homes.

All the, for want of a better word, arguments that our peripatetic PM and trainee treasurer have deployed for putting a cap on super balances apply equally and exactly to ending the unlimited tax-free status of the family home.

Indeed, they could even use exactly the same figure: $3m. You don’t ‘need’ more than $3m in super, they say. Surely then, no-one ‘needs’ to live in a family home worth more than $3m either?

Why should people with super balances of $5m, $10m and indeed $100m or more get the, for them, super-sized super tax concessions?

Why indeed then, should people living in $5m, $10m or $100m homes pocket millions and tens of millions of tax concessions when they sell?

Those super tax concessions are just getting – according to our duo, unsustainably – bigger and bigger every year. Why, by 2050, according to the duo, they’ll be ‘costing’ $50bn a year.

Well, that’s chicken feed against what it ‘costs’ the budget to leave the family home capital gain-tax free.

According to the Treasury analysis that used to have the fiscally Orwellian title “Tax Expenditures Statement” – now, perhaps in embarrassment, the more bureaucratically anodyne “Tax Benchmarks and Variations Statement” – the cost of the tax concessions on the family home have already surged way past that $50bn.

The last Treasury estimate was a cost of $64bn for the 2021-22 year. An earlier Treasury estimate, by the bye, had them costing nearly $100bn by 2021-22 - just another example of peerless Treasury forecasting.

Why should people living in $5m, $10m or $100m homes pocket millions and tens of millions of tax concessions when they sell?

Why should super become a means of estate planning for the rich and even just the relatively well-off, the duo assert?

Why indeed then should the family home become an even bigger means of estate planning? Far more people pass on their homes than their super balance.

With obviously, those living in $50m and $100m homes able to pass on much bigger lumps of tax saving to their heirs and successors than those living in $3m and $5m homes.

And those in $3m and $5m homes so much tax-free better-off in their estate planning than those in $1m and $1.5m homes. With $500k home-owners better off, courtesy of the tax man, than those renting and passing on diddly squat.

The devil in the relentless inflation-compounding detail is that many – most – could never imagine having a super balance of $3m or living in a $3m home.

So the average person might think they had little-to-zip to fear from the taxing of $3m-plus super balances; and similarly with the taxing of $3m-plus homes.

But ask yourself, how many ever thought they’d be living even in a $1m home – now passe in Melbourne and Sydney?

How many thought they’d ever be in the top tax bracket, hit at $180k? Or even the bracket below that, where you have the pleasure of handing over 39c of every dollar of extra income over just $120k?

Well, more than 500,000 are in the top bracket, heading – rapidly, thanks to accelerating bracket creep – to one million before 2030.

And over 2m, heading just as rapidly towards 3m, are in the second bracket.

I can remember when the first home in Toorak publicly sold for more than the then incredible figure of - $1m.

I can also remember when CEOs got paid around or less than $200k a year.

There’d also be little-to-zip comfort in an Albo promise not to tax the family home. That it’s not in “The Plan”, which we’ve heard zip of since the election.

Nor was any change to super; the absolute promise of “no change” got re-defined post-election as a promise of no ‘big’ change.