Looking ahead to 2019, a looming change which may impact the Queensland and national property conveyancing markets is potential tax reform on property investments.
Here are 5 key things to be aware of as policies ahead of the 2019 federal election take shape:
- Experts expect the election will be held in May 2019.
- Labor’s proposed tax reforms include:
- a rollback (other than for newly built homes) of ‘negative gearing’; and
- reduction of the current capital-gains tax (CGT) discount for investors from 50 per cent to 25 per cent – negative gearing is a concession that allows property investors to offset losses / interest against their taxable income.
- The proposed changes would be ‘grandfathered’ in, and therefore have no impact on investors with existing negatively geared properties.
- Opinions are divided on the impact this may have on property prices overall, affordability for first home buyers and on rents.
- The Treasurer recently issued a warning “If you own your home, it will be worth less. If you rent your home it will cost you more”. However, Treasury modelling released earlier this year found that the effect of Labor’s reforms on home values was likely to be mild.
KRG Conveyancing understands the important role investors play in maintaining a dynamic property market. Around 1 in 3 settlements that KRG Conveyancing acts in are for investment properties.
Clients who currently hold investment properties, or who purchase ahead of the potential tax reforms, may be able to take comfort that the benefits of negative gearing will continue for their investments.
For any of your clients purchasing or selling an investment property, KRG Conveyancing provides a free contract review by one of our property solicitors before contract signing to make sure your clients know where they stand.
Best wishes for successful selling in the lead up to Christmas!
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