Proposed changes by the Federal Government and their Opposition counterparts to taxation arrangements... Auction market records another positive week...
Negative gearing, CGT changes draw mixed responses from experts
Proposed changes by the Federal Government and their Opposition counterparts to taxation arrangements such as negative gearing and capital gains tax have garnered mixed reviews from those within the property investment industry.
While property and construction lobby groups came out swinging against the proposed changes, there has been a more pragmatic response from people within the industry.
Last weekend saw the Opposition announce that from 1 July 2017, negative gearing would be available only to investors who purchase new housing, while the current capital gains tax discount of 50% would be reduced to 25%.
The Federal government is believed to be considering either capping the amount that is deductible via negative gearing or a cap on the number of properties that can be negatively geared.
For Phillipe Brach, chief executive officer of Multifocus Properties & Finance, Labor’s proposal of halving the CGT discount is something he disagrees with as an investor, but he has no philosophical objection to it.
“When you look at when negative gearing was first introduced it was supposed to be a tax deferral method, not a way to avoid paying tax. The idea was that you defer the tax you pay and then you sell the property you pay the whack of taxes,” Brach said.
“But then the 50% discount was introduced and it meant that people really were avoiding paying their taxes. So while as an investor I don’t like to see the discount cut, I don’t have any philosophical issues with it,” he said.
Auction market records another positive week
Australia’s auction market has returned another week of positive results, with the national clearance rate again rising above the 70% mark.
After finalising at 70.1% over the previous week, preliminary figures from CoreLogic RP Data currently put this week’s clearance rate at 72.3%, only slightly lower than the 74% recorded over the corresponding week one year ago.
Thea busiest auction market over the weekend was Melbourne, with the Victorian capital returning a preliminary clearance rate of 73.6% from 440 reported auctions.
That mark is currently lower than the previous week’s 77.6%, however it is higher than the 70.9% recorded at the same time last year.
The strongest performing Melbourne sub-region was the Inner East, with a clearance rate of 81.4% across 52 auctions.
Sydney’s preliminary clearance rate currently sits at 78.6% and no downward revision of that figure would give the harbour city its first weekly clearance rate higher than Melbourne since mid-September 2015.
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Proposed changes by the Federal Government and their Opposition counterparts to taxation arrangements such as negative gearing and capital gains tax have garnered mixed reviews from those within the property investment industry.
While property and construction lobby groups came out swinging against the proposed changes, there has been a more pragmatic response from people within the industry.
Last weekend saw the Opposition announce that from 1 July 2017, negative gearing would be available only to investors who purchase new housing, while the current capital gains tax discount of 50% would be reduced to 25%.
The Federal government is believed to be considering either capping the amount that is deductible via negative gearing or a cap on the number of properties that can be negatively geared.
For Phillipe Brach, chief executive officer of Multifocus Properties & Finance, Labor’s proposal of halving the CGT discount is something he disagrees with as an investor, but he has no philosophical objection to it.
“When you look at when negative gearing was first introduced it was supposed to be a tax deferral method, not a way to avoid paying tax. The idea was that you defer the tax you pay and then you sell the property you pay the whack of taxes,” Brach said.
“But then the 50% discount was introduced and it meant that people really were avoiding paying their taxes. So while as an investor I don’t like to see the discount cut, I don’t have any philosophical issues with it,” he said.
Auction market records another positive week
Australia’s auction market has returned another week of positive results, with the national clearance rate again rising above the 70% mark.
After finalising at 70.1% over the previous week, preliminary figures from CoreLogic RP Data currently put this week’s clearance rate at 72.3%, only slightly lower than the 74% recorded over the corresponding week one year ago.
Thea busiest auction market over the weekend was Melbourne, with the Victorian capital returning a preliminary clearance rate of 73.6% from 440 reported auctions.
That mark is currently lower than the previous week’s 77.6%, however it is higher than the 70.9% recorded at the same time last year.
The strongest performing Melbourne sub-region was the Inner East, with a clearance rate of 81.4% across 52 auctions.
Sydney’s preliminary clearance rate currently sits at 78.6% and no downward revision of that figure would give the harbour city its first weekly clearance rate higher than Melbourne since mid-September 2015.
You may have missed:
Looking inside the property investor's mind
How to overcome excuses
What are the consequences of the investment lending crackdown?
