The federal election has been called for Saturday May 18th. There’s obviously a range of issues both parties differ on but let me shed some light on two changes that could impact your property and finances.
1. Capital Gains Tax (CGT)
Currently capital gains taxes can be discounted at 50% if the asset has been held for more than 12 months. If they win, the Labor government will halve the capital gains discount to 25% for all assets purchased before a date yet to be determined. Labor has said small business assets and investments by super funds will be excluded.
2. Negative Gearing
Currently property investors can deduct a range of expenses (such as repairs and mortgage costs) incurred against their income taxes. Labor has proposed significant changes to negative gearing that would see only new dwellings allowed the same deductions. Any existing properties that are negatively geared would be grandfathered as of January 1st 2020.
If you are feeling any uncertainty around the election and how it might impact your finances I’m happy to chat.