r Capital gains tax
Currently, individual, trust and Superannuation Investors are entitled to a 50% discount on the capital gain amount providing they have held the asset for more than one year. Labor proposes to halve that capital gains discount for all assets purchased after a date sometime following the next election, if held over a year, to 25%. The exceptions (for which the current rules will remain as is) are: • Investments bought before this date • Investments made by superannuation funds • Investments/Assets of small business owners.
We think :
So, anyone holding an investment property will be less motivated to sell as their capital would be diluted, thus creating less properties for sale. Effect : Upward pressure on Prices.
Negative gearing is where investment-related expenses are greater than Income ( Rent) and the loss is claimed / offset as a tax deduction against other income, resulting in the investor paying less tax / receiving tax refund. Labor proposes to limit negative gearing to ‘new’ housing. Losses from new investments in shares and existing properties will still be able to offset other income. These losses can also continue to be carried forward to offset the final capital gain on the investment.
So anyone with geared investment property now would be less likely be motivated to sell. Anyone building investment property less likely to sell. Potential buyers for geared Investment properties less likely to buy. Effect : slightly less demand from geared investors, significantly less supply of property for sale . Upward pressure on Prices. Therefore the purpose of social engineering would actually go the other way and Property, especially in Melbourne, Bayside & Inner will be at a premium.o
property moving forward
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