With the 2019 federal election on the horizon, changes to the negative gearing policy have become a frequent topic of discussion. Introduced in the 1980s by the Hawke government to encourage Australians to populate the housing market with rental properties, the policy did its job. Unfortunately, more than 35 years later, shifts in the social and economic landscape have led some to question why it’s still in use. At the heart of the matter, questions are being raised around who these possible changes may affect and how.
Here at Industry Insider, we pride ourselves on being experts on the subjects that influence the property market, so allow us to walk you through it.
If you’re a first home buyer
If you’re looking to buy your first home, the possible change in policy might benefit you. With the property market predicated to shift if the proposed reform goes ahead, housing prices could fall. For context, over the last 20 years, the median house price in Australia rose to nearly $809,200, a sum that has locked many out of the property market. If you fall into this category, the potential reform might be a welcome sign for you to start looking for a place of your own.
If you’re already invested
If you’re one of the 2.3 million investors in Australia who already negative gear a residential property, you’ll still be allowed to claim capital gains tax (CGT) on your property. The proposed policy will only affect properties purchased post-reform, because Labor has promised to ‘grandfather’ any changes.
If you’re wanting to buy an existing property
Those looking to purchase an existing investment property post-reform will be hit hardest. The changes will mean you cannot claim your losses at the end of the financial year. But it’s not all bad news; off-plan properties with no existing structure will still be eligible to be negatively geared. This means that available land in newly developed areas could be an option for first-time investors looking to build their property portfolio.
With these potential changes on the horizon, there’s no doubt this issue may continue to cause confusion and stress for potential home buyers and investors alike. We recommend getting in touch with Industry Insider’s newly created Property Management Division. Our team of experts can give you advice and guidance on how to handle the possible policy changes, no matter how they may impact you.
If you need any assistance in buying a home, don’t hesitate to speak with one of our Property Buyer Agents on +61 8374 7652 or book a Zoom call here
https://calendly.com/propertychat/discussion-with-industry-insider
Industry Insider Property
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+61 8374 7652
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