There is every likelihood that Bill Shorten will be our next Prime Minister of Australia. He is the odds-on favourite for The Lodge.
The Labor party has made major announcements about the changes they intend to bring about. They have made no secret about the changes to the rules on negative gearing and capital gains tax (CGT) for residential property. These are likely to be enacted as soon as budget night April 2nd, 2019.
A future government wanting 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.
Labor also intends to pare back the capital gains discount for investors from 50 per cent to 25 per cent. However, it is anticipated that current arrangements will be grandfathered.
It is calculated that the end of negative gearing will increase out-of-pocket costs for most new investors by about $200 to $300 a month.
The clear message is that the impact of negative gearing and capital tax changes could have a negative effect on the incentive to purchase both new and existing properties.
For those interested in creating wealth the window of opportunity is very tiny. Just about two months. You need to take action now!
If you think that this is simple scaremongering, you have the option of waiting, doing nothing and finding out it’s too late!