I'm not an economist and only given this some basic thought. If you apply a 15% GST when you purchase a house and make that GST refundable or partially refundable depending on whether you make a capital gain when you sell it in X many years at 1% refund per year minus the capital gain for 15 years. So for example you buy a house for $1m and pay $150000 GST then
1) you sell it in 5 years for $1.25m and make a 100000 capital gain - no refund (5/15 of GST - 100000=-50000=no refund)
2) you sell it in 5 years for $1.1m - refund $50,000 (5/15 of GST-0=5/15 GST)
3) you sell it in 2years for $1.1m - refund $20,000 (2/15 -0=2/15 of GST)
4) you sell it in 15+ years for $1.1m- refund $150000 (15/15-0=all of GST)
5) you sell it in 15+ years for $1.3m - refund $100,000 (15/15 of GST-50,000=100,000)
Something like that anyway.
This would stop speculation as flipping houses would mean less refunds -encourage long term living
You pay the tax upfront so the government gets to use this money instead of waiting for you to sell it to get a capital gains tax - it also bring homes into line with GST.
Elderly people with no cash flow don't need to pay an annual tax - its already paid
Making a loss on your home after 15 years would be rare so the government is guaranteed this tax.
It's kind of a capital gains tax that stops speculation but gives the govt money upfront.
LVR wouldn't be applied to the GST content and the GST can be mortgageable so young people don't need to save more.
Would this be simpler or would this not work?
Do you like this suggestion?