SPECULATION TAX ON PROPERTIES

Press, Volume CXIII, Issue 33252, 15 June 1973, Page 1

SPECULATION TAX ON PROPERTIES

A property speculation tax effective from last night is introduced in the Budget and will apply to properties or interest in properties held for less than two years.

The tax will be assessed on the profit on sale, and this will take into account the cost and sale price, and any income and expenditure taken into account for income tax.

The rate of tax on the excess return will start at 90 per cent, and reduce over the two-year period to 60 per cent, after which normal tax will apply. “I want to emphasise that this measure is not aimed at the genuine home-owner, and is, in fact, designed for his protection,” said Mr Rowling. “Subject to certain safe-

guards, there will be a general exemption for people selling a home. “Certain other transactions will be exempt, such as the disposal of property by an estate. I do not see this tax as a source of revenue, but as a means of discouraging property speculation.”

Mr Rowling said that the abnormally large increases in land and property prices were, the Government believed, in part due to the activities of speculators. The Government would see that the situation was not exploited by those who bought and sold for a quick profit. The provisions of the Land and Income Tax Act would be tightened as from last night relating to the liability to income tax of profit derived from the sale of real estate. The Government believed that these measures would curb short-term speculation and bring about a marked slowing-down in the rise of land and property values, said the Minister.