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• Negative Gearing
• Capital Gains Tax
• Franking Credits

 

Some interesting points made by Todd Hunter.

Found a group not affected by the proposed changes - those on a defined benefits super scheme. They haven't paid tax on the way in, and will pay as they collect their super - most of these are retiring/retired public servants and politicians ie baby boomers.

 

is it the old SAS super Scheme, it is not available anymore, isn't it?

 

I don’t invest in property anymore (sold the last IP last year thank Christ) but if there’s one thing that I see all the time and the one thing that rarely turns out to be the case is “I’m never going to sell”! For one reason or another investors generally do end up selling their IP(s) if not the lot then certainly some of them.

So should Labor get their proposals legislated property investors seem to take comfort in the fact that any changes to negative Gearing being only available to investors in “new” property and because of grandfathering she’ll be right mate. But many of the “I will never Sell” types WILL end up selling at some stage and being “established” properties the pool of buyers will be significantly reduced unless priced accordingly which may be a lot worse than expected. Not hard to figure out what the result will be.

No one knows the future but this could be very interesting indeed.

 

Add to this the proposed minimum 30% tax on Discretionary Trusts used by many small businesses and a sizable number of investors.

 

This article assumes ALL buyers are investors only, and that ALL investors are only interested in negatively geared properties.

Many, many successful investors are relatively conservative in their approach. And tax benefits should only ever be the icing on the cake, not the reason for the purchase.

The change in CGT could be better managed. I would prefer to see 25% discount after 1-5 years, 50% after 5 years.

And yes, I will lose my franking credit refund.
Marg

 

not 100% sure about what Todd Hunter's implying re NG, I assume he was saying:

when the general public ( not the well heeled investors) see the negative gearing is gone, the perceived "benefit" is gone, thus there are less buyers in the market, less competition, thus less increase in price, less capital gain ( which is majority of investors are after). investors make more gains by selling to non investors ( not well heeled investors)

 

Apart from the sentence "one foul swoop"? everyone gets that wrong though.

Some good points but too emotionally charged and condescending for my liking. Nothing new either although he's right. Unfortunately I don't think most people think long or even medium term when it comes to this stuff.

- Andrew