Labor has announced that it will implement its plan to restrict negative gearing to new investment properties and halve the capital gains tax discount from 1 January 2020.
The date, announced by shadow treasurer Chris Bowen, will limit negative gearing to new housing, with all investments made prior to the date to be fully grandfathered.
Likewise, the CGT discount will be halved to 25 per cent for investments entered into after 1 January 2020.
If you are intending to purchase a rental property, do this before the introduction of the new legislation and lock in the CGT discount at 50% before it is reduced to only 25%.
As you know, property prices have come off but are likely to pick up towards the end of the year, not just because investors will want to lock in a 50% CGT discount but also because the next interest rate move is predicted to be downwards to stimulate the economy. This will lead to more confidence and a pick up in property prices.
Call our office if you have any questions regarding negative gearing whether it be outside or inside of super.
Work smarter not harder.