The government has flat-out rejected a p

The government has flat-out rejected a proposal to gradually halve the capital gains tax (CGT) discount, amid concerns that the status quo would eventually have a negative effect on the housing market.

“The government has absolutely no intention of reducing the capital gains tax discount or making changes to negative gearing,” said Finance Minister Mathias Cormann, as reported by The Sydney Morning Herald.

A report by the Grattan Institute released last year said that the “interaction” of the current 50% CGT discount with negative gearing “distorts investment decisions, makes housing markets more volatile and reduces home ownership.” It claimed that such tax breaks largely benefit the wealthy.

Slashing the discount to 25% would raise the government about $3.7bn a year, the report said. The reduction would happen gradually, with 5 percentage points reduced annually over five years.

“Tax concessions for capital gains undermine the integrity of the income tax system by creating opportunities for artificial transactions to reduce income tax.”

The report also called on the government to “follow international practice” and not deduct losses from passive investments from labour income. “Change would raise $2 billion a year in the short term, falling to $1.6 billion as losses start to be written off against positive investment income,” it added.

Cormann said that the ruling coalition “needs to get the budget back into surplus,” but that it still wants to deliver lower taxes to strengthen growth and create more jobs.

Prime Minister Malcolm Turnbull said the coalition does “not support the Labor Party’s plans to increase capital gains tax or indeed their plans to outlaw negative gearing,” as reported by The Sydney Morning Herald.

The opposition would look at the proposal “if it’s a step in the right direction,” Labor frontbencher Tony Burke told Sky News.

“Be in no doubt you cannot allow the situation to continue where the government is giving more help to somebody buying their tenth home than to a first home buyer,” he added. http://ow.ly/74kD3093l0V

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Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. http://goanimate.com/movie/0M4bvcZzgIbI?utm_source=linkshare&uid=0u6RGtWsmlVc Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085. http://www.ljgrealestate.com.au http://www.yellowpages.com.au/qld/aspley/lj-gilland-real-estate-pty-ltd-14091356-listing.html http://au.linkedin.com/in/lindajanedebello http://twitter.com/GillandDebello http://www.facebook.com/pages/ljgrealestate
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