Labor confirms 1st January 2020 – start date for negative gearing and CGT proposal.
Labor has announced that it will implement its plan to restrict negative gearing to new investment properties and halve the capital gains tax discount from 1st January 2020.
The date, announced by shadow treasurer Chris Bowen, will limit negative gearing to new housing, with all investments made prior to the date to be fully grandfathered.
Likewise, the CGT proposal discount will be halved to 25% for investments entered into after 1st January 2020.
The announcement will bring greater certainty to investors who were waiting on Labor to provide more details around its proposal.
The Parliamentary Budget Office has costed the two measures to raise $2.9 billion over the forward estimates period to 2022-23, and $35.1 billion over the next decade.
The fact is, the benefits of both negative gearing and the capital gains tax discount are skewed towards the wealthy, with the Grattan Institute estimating almost 70% of the benefit of the CGT discount accrues to the top 10 per cent of income earners.
What does this mean to you?
If you are considering an investment property, this is the time to reap benefits before the new rules come into effect.