3 ms·
Well how do you define exploiting? For example well-off person buys a house, improves the value, sells it tax free, makes a couple years salary in profit tax fr
by mc3 7y ago
Well how do you define exploiting? For example well-off person buys a house, improves the value, sells it tax free, makes a couple years salary in profit tax free, repeats it again and again. Property ladder on steroids.
The intent of no CGT tax on your primary property is IMO security for families, but it can be exploited to make a regular alternative source of income tax free.
- ip26 7y agoThe point of the home sale exclusion is to allow you to move. The presumption is that when you sell your primary, you are likely using the proceeds to buy another primary- which has probably gone up in value just as much as your old house. Exploiting would be more like renting a house out for twenty years and then claiming it as your primary just long enough to sell & claim the exclusion, maybe without even renting out your original-primary. The resident-renovator isn't something I worry about. You might be getting a tax break on your sweat equity but improving a house is hard work and when you run the numbers it's often not much more profitable than working a day job.