SYDNEY, May 11 (Reuters) – Australia’s centre-left Labor government will offer a one-year grace period for planned changes to capital gains tax discounts and negative gearing in the federal budget to be handed down this week, the Australian Financial Review reported on Monday.
Proposed changes to these policies, long criticised for skewing housing ownership towards investors and away from owner occupiers, cost Labor a national election in 2019. However, Prime Minister Anthony Albanese’s landslide victory last year strengthened the government’s hand to address intergenerational inequality facing many young Australians.
• Citing people familiar with the budget, the AFR reported the government will scrap the 50% capital gains tax discount on assets held for more than a year from July next year and return to the pre-1999 policy of taxing inflation-indexed gains. The one-year grace period means assets acquired after budget night will continue to receive the 50% discount until mid-2027.
• Negative gearing, which allows investment losses to be offset against taxable income, will be grandfathered for landlords who have properties already negative-geared. Only newly built properties will be able to be negative-geared from now on. However, existing properties acquired after budget night could still be negative-geared until July 2027, but not after that.
(Reporting by Stella Qiu; Editing by Paul Simao)
Comments