Labor's proposed property changes: why investors shouldn't wait to buy

25/01/2019   Michael Williams, Managing Director

Over the last few months it’s been difficult to ignore articles discussing Labor’s controversial plans to scale back negative gearing for investors who buy existing property and halving the capital gains tax (CGT) discount.

What’s happening?

In short, if elected Labor plan to cut back the CGT discount from 50% to 25% for newly-purchased property assets held for more than one year, meaning for those assets three quarters of each gain will be taxed instead of one half.

Changes to negative gearing would also restrict tax deductions for mortgage payments to newly built properties.

Only existing houses, flats and commercial premises would be excluded from the scheme.


When will it happen?

Even if the polls are half right, Bill Shorten will be Australia’s 31st prime minister.

With the federal election likely to be done and dusted come the end of May, it is looking very unlikely the Morrison government will recover from their horror 2018 paving the way for Shorten’s Labor to take charge.

Once elected, the ALP will likely try to fast track their changes through parliament. If successful, they could be in effect as soon as July 2019.

How will the changes impact you?

Let’s look at how these changes might impact the average investor pre vs post implementation.



Now is the time to act

The reality is these investor benefits will soon be a thing of the past as the ALP are keen to level the playing field for first home buyers.

However, as the proposal includes a grandfathering provision, those who act quickly can still get ahead of those who wait around.

Savvy investors know to run toward the storm when the headlines spell doom and gloom. A correction in the market is to be expected and should not discourage those looking to get started.

Pockets of Melbourne and Brisbane (even Sydney) are currently experiencing some fantastic results.

Don’t wait around to get stung by Labor’s proposed changes. Seek advice from one of The Hopkins Group’s property advisers and request an appointment via the form below!


Disclaimer: The information contained herein is general in nature and does not take into account individual situations, needs or goals. It should not be relied upon and persons should satisfy themselves through independent means that any decisions based on this material are appropriate. We recommend that you consult with your adviser who will be able to make a recommendation based on your specific circumstances.

The benefits of becoming a Property Developer

13/03/2019   Jon Archer, Marketing Manager

Thinking about property development? Check out our top five benefits of becoming a property developer and contact an expert at The Hopkins Group today.

Read More

Pets in your rental property – how the rules are changing

18/01/2019   Tannaya Jessop, Property Portfolio Manager

With a slew of changes set to shake up the Victorian Residential Tenancies Act over the next year, Property Portfolio Manager Tannaya Jessop explores the implications of one of the changes making landlords and their agents the most nervous – the new rules around tenants and their pets.

Read More

Property investment – expectation vs reality

22/11/2018   Alison Nguyen, Accounts Administrator

When it comes to property investment, there are many myths and expectations – but how do these match up with reality as an investor?

Read More

Close *Required Fields