Is the tide turning...

Sorry if this has been covered in another thread. I've been living under a rock for the past three months--busy at work. Have just started to catch up on property market news. I have to say that the momentum against investment property tax concessions seems to have really picked up...what with all the discussions against IO loans, winding back of CGT concessions and abolision of negative gearing. Is this just the lefty side of news outlets having a pre-budget push or is it realistic to expect changes? Has there been any discussion on whether possible changes would be retrospective? Thanks all.

 

Most changes made by Australian governments to rules around investment and tax treatments of profits are not retroactive.

 

Current whispers suggest that neg gearing will be retained and ScoMo stated this last week. But what he didnt say is the whisper is that taxpayers may face a cap. I would think it would apply from 2017/18 if introduced.

Other speculation concerns CGT on resi property. This one I suspect has strong legs in some form. The ALP policy is to reduce the CGT discount from 50% to 25%. Whispers are that Libs wont want to copy that policy but if they bought indexation back AND eliminated the discount it would equate to approx a 30% - 15% discount for most taxpayers. So some taxpayers would be better off than the ALP policy. It also has greater effect on short term sales discouraging short period speculation investment. And it could be retrospective due to the indexation issues. (ie it self corrects for the time value of money and is a uniform policy).

Another whisper is a CGT / rental income withholding tax requiring tax file number disclosures and greater info at time of sale for all properties etc....That would take a year + to get up and running. Danger is it could be a lot of admin for little tax revenue gain. Two groups of view on this one - Some say it would identify avoidance of income and others suggests it a small population. I reckon its seems costly to administer.