CGT and negative gearing under threat

Sweeping policy changes from the ALP, soon to be mirrored by the Liberal government, mean serious challenges for investors in property and shares.

Summary: Proposed changes by the ALP to negative gearing and capital gains tax will apply to all assets other than new housing from July 1, 2017 if a future Labor government is able to put this plan into action. The changes mean that investors would no longer be able to negatively gear shares after July 1 2017, and that the CGT discount for assets bought and then sold after 12 months would drop from 50 per cent of an investor's marginal tax rate to 25 per cent. It is currently unclear what the Liberal Party’s policies will be in this area, however all changes proposed by the ALP will see a grandfathering arrangement whereby existing investments have the old rules apply.

Key take out: If these changes were to be realised, investors will have until July 1, 2017 to prepare their portfolios with the new rules in mind.

Key beneficiaries: General investors. Category: Tax.

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