Sir, – Fintan O'Toole misses a broader point when mulling the fairness or otherwise of inheritance tax ("Here's a hard choice for politicians with backbone", Opinion & Analysis, August 4th). Why are certain unearned gains regarded as sacrosanct and exempt from taxation? I'm referring to the capital gains exemption for a principal private residence. Defence of this loophole is couched in terms of fairness for those who "worked hard" or "paid their mortgages after tax", which of course misses the real point. Those who rent their homes also work hard and are obliged to pay their rent net of income tax; however a renter who invests in an investment fund or a productive, job-generating business is required to pay tax on any gains.
This unique exemption has fuelled the perception of property as a one-way bet, and encourages hoarding of properties larger than needed for shelter, since all other things being equal it’s better to retain an asset than generates a tax-free return than one, such as a business, that is subject to tax.
Fintan O’Toole makes his usual patronising references to “right-wingers” and their ideals of self-reliance but perhaps he should take inspiration from the much-maligned US, which levies federal tax on home sales profit above $250,000 for a single person with an exemption for those “trading up”. – Yours, etc,
PAUL KEAN,
Dublin 8.