What should I do if I lose CGT discount and negative gearing?

CGT change doesn't matter unless you decide to sell.

Negative gearing changes won't prevent landlords from using expenses to offset rental income....

If you hold a property long enough, the rental income will end up exceeding your holding costs making the property positively geared (if it wasn't already).

So this legislation change will just mean property investors will just hold their properties indefinitely further reducing the number of properties for sale and increasing property prices.

Kind of the opposite of what first home buyers want... but they will vote for it anyway because they think it will somehow cause the property market to crash and make houses cheap for them to buy ‍♂️
 
Let’s focus on investments that bring in more cash . Negative gearing only helps if you’re losing money (not great). So, why not earn a dollar and keep 70c way better than losing a dollar and getting just 30c back!
 
I invested in lower valued properties without negative gearing, and it ended up keeping more first home buyers out of the market. That truth now fills me with deep regret because that's not what Labor and a colleague said would happen.
 
Hey, FA here. It's the same old thing landlords have been doing for years and years.

They raise rents and pass the costs down the line to make up the difference.

It doesn't fix the housing crisis. It just gives the ATO more tax revenue, and that cost ends up being paid by renters. Simple as that.
 
I'm waiting for the actual budget to be released. Then I'll be able to make an informed decision with the facts at hand. No point worrying about it before hand. The amount of nonsense coming out of the media is getting RIDICULOUS.
 
It does no affect me, and quite a few people who have planned everything in advance.

I plan to step away from full time work by age 55 through geo arbitrage and moving to a lower cost country. I have done some thinking and already shared a few details in other posts in this group.

My plan is to sell my principal place of residence (PPOR) and use the capital gains tax (CGT) free profits to pay off the investment property (IP) debt, then live off the IP rental income. Another option I have started exploring is living off the CGT free profits from the PPOR sale. That could be better than living off rental income to save on taxes, since the first dollar is taxed for non Australian tax residents. So using the rent to pay the loan against properties might suit better in this journey.

A couple of additional points I have researched: we will not get any CGT discount when we become non Australian tax residents. So selling the PPOR (which I plan to do) or any other IP before leaving works well.

The last piece is that I will need to sell the IP in my self managed super fund (SMSF) and wind up the SMSF, because more than 50% of trustees must be onshore, or the SMSF becomes non compliant. I plan to wind up my SMSF and roll back the funds to an industry super fund.
 
We plan to sell next FY.
I think our only option: reduce gross income.
Both of us take six months off.
Daughter out of daycare as much as possible.
Get private hospital cover.

After the sale, dump profit into PPOR.
Redraw CGT and child care adjustment bill into offset.
Refinance.
Ride minimum repayment until FY27–28.

We'll have four years left on PPOR.
CGT and daycare bill due June 2028.
Grandfathering would be nice.
But it's the right time for us regardless.
 
I'll believe it when I see otherwise honestly, all I can see is this, and it's hard to ignore:

1. Rents are going to go up, I just feel it in my gut.
2. It'll probably!get reversed once they see the damage it causes, because that's happened before, and it's frustrating.
3. Lower end properties are going to rocket, we're already seeing it, because now people will want to be positively geared instead.
4. People investing in IP are doing it for wealth creation, so unless they stop immigration, inflation, wage growth, the housing shortage, and all the red tape that blocks building, that cycle just won't stop.
5. Those who hold mass properties they hardly ever sell, honestly. They just cycle, roll the debt, and pull equity. That's the reality.
 
Back
Top