Albos War on Property Investors

Scott,

 I read a financial commentator suggesting Labor is planning to cut the Capital Gains Tax discount from 50% to 25%, and that anyone thinking about buying an investment property should do it before the May Budget. What are your thoughts? 

Phil

Hi Phil,

There's a good chance the Treasurer is floating this now to soften people up. Whether it actually happens in May will depend on how loud the backlash is over the next few weeks.

That said, I've always thought the CGT discount was a bonehead policy. It pushed property prices higher.

Which was exactly the point.

And if this change only hits property (rather than shares), then owning an investment property will become less attractive after Budget night: Good news for first home buyers. Bad news for property investors.

My view?

I don't make investment decisions based on proposed tax changes. But over the long run, Aussie shares with their tax-effective franking credits are likely to deliver better income, stronger growth, and fewer hassles than being a landlord (after all, shares do not leak, break, or ring you on a Sunday needing a plumber).