Changes to negative gearing and capital gains tax are now “much more likely

Results of a study released earlier this month show that removing negative gearing would cut home prices by 1.2% and increase rents only slightly.

An earlier study done in 2016 by the Grattan Institute found that getting rid of negative gearing and the 50% capital gains tax concession would save the government $5.3bn.

The severity of the impact on investors would depend on how market sensitive the changes are.

The worst case would be if the changes were to apply to both existing and new investors when interest rates are rising and property prices are stagnant or falling.

Income tax and capital gains tax changes have not been retrospective, and that existing investors have been protected from the impact of changes.

In theory, a future government wants to maximise revenue and encourage the disposal of assets could apply the new tax provisions to all capital gains accruing after the date of the change. In technical terms, that wouldn’t be a retrospective change but it would pose difficulties for the Tax Office and investors.

Changes to capital gains tax are likely to apply only to new investors and affect only future demand for property.

Meanwhile, exempting investors in new properties from changes to negative gearing tax would favour high-level gearing of new houses. But the benefits would not necessarily offset the impact of the proposed 50% capital gains tax liabilities increase when an investor sells a property

Source Sydney Morning Herald 27-1-18

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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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