John Consiglio (November 27), in his reply to Frank Salt’s contribution, makes a case for considering the proposed changes to the present capital gains tax regime as fair and reasonable.

However, he has not taken into consideration that a tax on gain or profit, which many consider reasonable, is being replaced by a sales tax, calculated purely on the value of the property being sold and without any regard as to whether the sale results in a profit or a loss.

This will create a strong incentive to hold onto under-utilised property and only sell when you can cover your tax liability.

A few years ago, property prices were galloping ahead at a rate of 10 per cent to 15 per cent per year, so capital loss was rarely an issue.

The current property market offers a very different scenario. The cream has held its value, even appreciating, while most other sectors are stagnant or drifting down in value.

The market has a glut of vacant apartments, many of them poorly designed, resulting from the short-sighted change of zoning from two to three storeys.

In many cases this actually means that a two-storey home for one family was replaced by a five-storey block of apartments.

Introducing a disincentive to sell, at a time when the market is flooded with vacant residential accommodation, cannot be considered sound planning. Furthermore, a sales tax is usually incurred on the first sale only. Second hand sales are exempt.

The property market is dominantly a “second hand” market so a sales tax levied on each transfer is anything but fair and reasonable.