So what? Well this election has battle lines drawn on two key property issues, negative gearing and capital gains tax. Last week we demystified Labor’s proposed changes to negative gearing.
This week we’ll focus on capital gains tax.
Labor’s policy proposes to halve the capital gains discount for all assets purchased after a date they’ve yet to decide. This will reduce the capital gains tax discount for an investment property you’ve held longer than 12 months from the current 50 per cent to 25 per cent. All investments made before this date will be “grandfathered”. This means they won’t be affected by the change. Some other exemptions apply for superannuation funds and small business assets.
So is this a good thing or a bad thing?
Well it depends on your circumstances. If your investment property has seen significant price growth since you bought it, then under Labor’s policy, you’ll lose more of that gain when you sell it.
If you don’t have an investment property you might not give two hoots about the changes.
But the Real Estate Institute of Queensland is concerned that any policy which pushes investors out of the market will lead to property price falls, which would affect all home owners. They’ve launched a campaign encouraging voters to Stand up for Stability and vote against the changes.
So what should you do? First of all, do your research. Understand what the changes mean for you then grab a placard to support the candidate who’ll deliver what you want.
Want to make a move before the election? View our current listings for sale or talk to us about selling.
