Will there be a Investor sell-off before this years Election..

What do people think when over 60%of property investors are negatively geared ,combine that with falling house prices and future capital gains on the slim side ..

With Labor and their future plans to target investors all it will do is put additional downward pressure on prices..

 

and the impact of CGT discount reduction?

 

Negative Gearing will be grandfathered so if anything their may be a rush to buy to lock it in before effective date.

 

My guess is NG reform won't really do much either way compared to stronger market forces already at play.

To my understanding, NG wouldn't make sense for most future purchasers, since decent capital gains aren't likely Syd and Melb in the near term, seems like a dud strategy to lose money on yield and capital. I may be mistaken though, perhaps makes sense for HNW big shots?

 

According to a article in one of the weekend papers , possibly the The Australian thats already happening.
For investors that have seen really good capital gains ,some may see it as good opportunity to move on and find greener pastures.

 

I think there will be a mini boom before the elections and even bigger boom if labour wins. People will try to lock-in those grandfathered provisions before it’s too late. Who knows.

 

This.

I could envisage some short term negative sentiment (& continuing price declines) leading up to and for a short while after the election, but then I think we'll see a rush into assets to lock in the 50% CGT discount and/or negative gearing benefits before the cutoff date (presumably July 1st 2020 or later).

 

Is CGT discount being grandfathered too?

 

Yes

 

Thinking it over, surely they would have to grandfather it or they would cause a stampede?

 

Hi @wylie i have not seen the other thread. I’ll go have a read.

I’m just going on the text posted on the ALP website about the matter: Positive plan to help housing affordability
where it says:
No retrospective tax changes
Labor recognises that Australians make financial decisions in good faith on the tax arrangements in place at the time.

While making change to the tax system to improve fairness is a policy objective of Labor, it must be done without negative retrospective impacts on existing investments. This same approach was taken by Labor the announcement policy to curb generous and excessive tax concessions for high income superannuation accounts.

 

It’s grandfathered. They’ve been pretty clear about that. The costings are based on future transactions, hence it doesn’t generate much revenue in early years but ramps up over time.

 

And no, agree with others, there’ll be a lot that bring forward demand to purely to maximise concessions. It should cause a fall in investment demand post implementation date though.

 

My two cents - it is already having a negative affect on investor sentiment. Not the only thing, but definitely a meaningful piece of the puzzle.

Why - it is a source of uncertainty with the potential of a mild to moderate negative outomes for investors. Another reason to keep money sidelined. I don't think there will be any "mini-booms" to lock in existing benefits, the market will only respond once there is certainty on policy after election is done. That's assuming labor get in of course, still holding holding out faint hope that somehow ScoMo can pull a Stephen Bradbury!

 

I’m surprised that there isn’t more outrage over Labor’s proposed tax plan in general. I’m certainly outraged!!

 

The liberal party dont seem to interested in winning the next election .

"In a major blow to the Government's re-election hopes, Senator Scullion joins Human Services Minister Michael Keenan and Jobs Minister Kelly O'Dwyer, who both announced this week they would step aside from politics to focus on their families."

As far as negative gearing goes ,I think the longer Scott Morrision delays the next election , the worse it is going to get .

 

I want it to be called ASAP. That way, I can stick the Liberal sign up on the front of my house, and just get the result over with.

Call the election now and get the Liberal marketing gurus to just start laying down the facts. Labor wants to tax you more. Income tax, property, shares, whatever - it’s all going up under Labor. This is not a scare campaign, it’s a truth campaign, Middle Australia is financially worse off under Labor.

 

I would not worry too much some socialists on the other side of capitalism mistrust investors no matter what they invest in because they become free forward thinking and represent sole standalone independence and sometimes massive wealth --even if it isn't true at all..