Capital Gains Amendment Bill passed

first_img…despite absence of Opposition from National AssemblyThe Capital Gains Tax Amendment Bill was passed on Thursday in the National Assembly, as Government continued its legislative agenda despite the absence of the parliamentary Opposition from the proceedings. The Opposition People’s Progressive Party/Civic has since stated that now that the no-confidence resolution has been passed, all sittings of the National Assembly for usual business is unconstitutional. However, at the sitting on Thursday, Finance Minister Winston Jordan focused on the benefits of the amendments. According to Jordan, there is a need for Government to encourage more persons to acquire houses. He noted that there is a housing deficit in Guyana; a case of too many people and too little housing.“Section 2(c) of the amendments we are proposing is a relief such that if you sold your house and you reinvested the proceeds within that year in a house that cost similar or more than the value you got when you sold the house, you would be extended from payment of capital gains tax.”“In other words, if you got a house for $3 million and you sold it for $4 million, you would be liable for capital gains on the $1 million or 20 per cent. However, if you immediately reinvested the $4 million in a house that cost $4 million and above, you would be exempted from paying capital gains tax, saving you an extra $200,000.”According to Jordan, this provision is especially applicable for persons who sell their homes with the intention of buying another one. The Finance Minister cited young professionals as an example.“You know, as a young professional, you start off with a little (house) and as you rise in your profession and you gain more income, you want to buy something new, something larger and you may want to move into a more exclusive area.”“So we need to have incentives recognising such professionals and recognising such people who want to move up and this particular aspect of the Capital Gains Tax Act will allow them to do so.”Besides amendments to the Capital Gains Act, the Property Tax Amendment Bill was also passed on Thursday. This will increase the threshold for individuals to file a return, from net property of $1.5 million to $40 million.In addition, the same threshold will also apply for companies. It is likely that the amount of applicable taxes will be impacted by the countrywide property evaluations that Government has initiated.During the 2019 Budget debates, Opposition Leader Bharrat Jagdeo had zeroed in on the amendments to the Capital Gains Tax. He had noted that the changes were not as benign as they seemed.“A lot of my colleagues got excited about the Capital Gains Tax; if you reinvest your capital gains within six months at another property, you don’t have to pay; but they did not realise the Minister took away the ownership exemption they had — that if you own something for 25 years, you are not capital gains exempt.”“All the older folks who own their buildings across Guyana would not have had to pay capital gains if they sold their property. They now have to pay capital gains,” the Opposition Leader explained.last_img

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