Sunday, April 03, 2016

Deserves to be a scandal

I like to spend my one free article a week from the Saturday Paper on Richard Ackland's Gadfly column, in large part because I can always rely on him to pass on with high sarcasm and contempt any gossip about "Freedom Boy" (Tim Wilson).

But really today, while the Boy gets a mention, the best part is about the robotic Abetz, and it  sounds like this deserves to be a scandal:

The story had been around Tassie for a while, but it is nice that others can now share it. In 2000 Abetz paid $100,000 for almost four hectares of government land adjacent to his weatherboard house in the Hobart suburb of Kingston. Five years later the land was rezoned from residential to business and civic. Four months after that, Otto sold both his house block and the rezoned land to a property developer named Rockefeller for nearly $2 million. Rockefeller paid $400,000 for the large block of vacant land and for the Abetz house and land of about half a hectare, $1.5 million – more than five times the government valuation. In other words, Otto avoided a lot of capital gains tax which would have been payable on the unoccupied land, but was exempt on the family home. Otto insists that his old house, which has been demolished, had more road frontage, so the deal was entirely kosher. Tasmanian Times columnist John Hawkins, who has studied the transaction in searing detail, was onto him: “Erich’s throwaway line on road frontage as being the key to the increase in value of the house block and the decrease in value of the internal block is complete and absolute rubbish. The adjoining block – also with a house and with virtually the same street frontage to the Channel Highway – sold for a million dollars less than that owned by Uncle Erich, to the same purchaser at the same time. Erich, it was a way to transfer the profit on the ten acres to your home in order to avoid payment of capital gains tax. You know it, I know it, in fact we all know it. The question now is, has the tax man laid off collecting the tax as a result of your former exalted position? “If I am wrong sue me and we can investigate the matter in more detail.”

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