Quote Originally Posted by biscuit View Post
I think that is where we differ. I certainly do see why I shouldn't. Tax is being paid on the rent. If the properties suddenly go up in value, well good for me, and if they suddenly go down in value that's my hard luck. What has that got to do with the Government? People get too obsessed about paying tax on all "income" as though that was some kind of natural physical law. Then they get all tied up defining what is income and what isn't income. Address the specific distortions in the system but don't introduce a a new class of tax that is going to whack people already paying more than their fair share and introduce a whole load of new distortions.
I agree - don't introduce a new tax. That is why I say call it all income and tax it on that basis. There has to be a means of getting around the silly intention rule. At present a hairdresser who owns a block of flats, say, then sells after a few years, pays no tax. A builder doing the same thing does. The only way to avoid the distorions as you call them, is to class all gains as income. Think of the positive side - buying would become a lot less competitive meaning we might return to the days where investment flats, commercial etc, will have to be higher yielding to be attractivre to a buyer. Such things have become so competitive that they just make no sense. Taxing profits would deflate the market - although only a little. Most people still earn money in the full knowledge that there efforts will be taxed. The sad part is - most of them do it through being employed. Yuk!