dailyloe.com – The Albanese government will introduce tax reforms next week affecting capital gains tax, negative gearing, and trusts. This initiative aims to address issues related to housing, wealth, and intergenerational fairness.
Labor’s tax reform trio was part of its 2019 election platform, though the upcoming policy design will differ. The government anticipates a vigorous debate surrounding these changes, particularly among young voters who now form a majority of the electorate.
Negative gearing is set to be curbed, with the capital gains tax (CGT) discount potentially reduced from 50 percent to 25 percent. The proposal may include a return to a pre-1999 discount tied to inflation, as discussed in a recent Senate inquiry led by the Greens.
Key design questions include whether the new capital gains tax policy will be fully grandfathered. This would mean existing assets retain the old rules while future gains are taxed under the new system.
According to the Australian Financial Review, the government plans to maintain the existing rules for gains already accrued on assets, using the new rules for any future gains. Negative gearing changes are expected to be fully grandfathered, but details remain unclear regarding potential caps or limitations.
It is uncertain if the new policy will limit negatively geared properties or only apply to newly built properties. Further details may be released as the budget approaches.
