Taoiseach rules out capital gains tax on sale of family homes

The Government has ruled out any changes to existing arrangements that exempt the proceeds of a sale of a family home from capital gains tax.

A spokesman for Taoiseach Leo Varadkar said the Government has "no plans or intentions" to introduce changes outlined by senior officials at the Department of Finance.

The officials raised the prospect of abolishing relief on family homes from capital gains tax when they are sold in papers for the department’s tax-strategy group, which outlines options for the Government ahead of the budget.

Such a move would be extremely difficult politically and is highly unlikely to be introduced. Michael McGrath, Fianna Fáil's finance spokesman, said his party would not support such a move. The prospect also prompted strong objections from Age Action Ireland, the Irish Brokers Association and the Irish Creamery Milk Suppliers Association.

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Government sources said the papers from the tax-strategy groups are meant for discussion, generating debate and “setting out options”.

Taxpayers currently owe capital gains tax of 33 per cent of the increase in value of any property or assets other than the family home between the time they buy and sell them.

Among the options outlined in the tax-strategy papers are allowing relief only for homes up to a certain market value; allowing relief on gains up to a certain cash limit, with tax payable on any sum above that amount; and introducing a lower rate of capital gains tax for the sale of a family home.