If Labor move into government in the forthcoming election, they have signaled their desire to limit negative gearing to new housing and reduce the CGT discount from a potential 50% to 25%.
The date of commencement of these changes will be from 1 January 2020.
Shadow Treasurer Chris Bowen signaled that all investments made prior to 1 January 2020 will be grandfathered from the new rules, as will the halving of the CGT discount to 25% only apply to those investments entered into after 1 January 2020.
If implemented these changes would net the government an extra $2.9 billion out to 2023 and $35.1 billion over the next decade.
There are considerations to be aware of – it does look like you will be allowed to offset negatively geared investments with positively geared investments so those investors that remain in a positive or neutral portfolio won’t be too concerned about the negative gearing aspect of these changes.
Note these changes aren’t law and possibly won’t be legislated, but it’s a good idea to be aware of them nonetheless.
