A retiree with just $3 million in assets may be forced to sell one of his holiday houses under a brutal plan by the Federal government to reduce tax subsidies to people with over $3m in savings.
“If these changes happen, then we’ll need to sell our beach house. Or our other beach house. It’s outrageous,” said Fred Smith, a retired tax-planner from Sydney’s Double Bay.
Mr Smith has structured the ownership of his houses inside his superannuation plan, which means the rental income he gets is not subject to the normal rates of tax. “I know it sounds like I’m incredibly rich, if you look at all my income,” Mr Smith admitted. “But I’m actually not. I mean, if you look at my tax returns, my taxable income is zero,” he pointed out. “I’m basically broke.”
“Who knows where it will end? If things get really bad, I may need to cut back on the breakfast caviar. Or start drinking non-vintage Verve Cliquot!”
Mr Smith said the changes to his lifestyle could be quite radical. “We usually drive down the South Coast on the taxpayer-funded roads to spend time at the taxpayer-maintained beach, which is beautiful because it’s surrounded by a taxpayer-funded National Park. Of course, we’d get down there more often except that we’re getting old, so we have lots of taxpayer-funded medical appointments,” said Mr Smith. “It’s a lovely house. It’s in very safe neighbourhood, right next to the taxpayer-funded police station.”
“And now they’re asking me to pay tax? I mean, why? What has the government ever done for me?!”