Property tax is set for a crackdown from January 1 next year if Labor wins the upcoming election, which current polls suggest they will.
Labor last week announced they will bring in their changes to negative gearing and capital gains tax earlier than expected, leaving investors with just over six months to get in before the changes hit.
Shadow treasurer Chris Bowen says the proposed introduction date gives investors enough time to plan and invest while also giving his party enough time to draft the laws and get them through the Senate.
In further property industry reform, Mr Bowen says Labor will change the Build-to-Rent scheme which gives tax breaks to investors like super funds for building new rental properties, thereby helping housing affordability and supply.
The change involves halving the managed investment trust withholding tax rate from 30 to 15 per cent to stimulate new housing supply.
Mr Bowen says the main benefit of the scheme is to provide long-term stable rental accommodation in sought-after locations that are close to transport, infrastructure and jobs.
Also, Labor will commit $6.6 billion in a 10-year plan that will pay $8500 a year to investors who build new homes and offer them at 20 per cent below-market rent, which hopes for an outcome of 250,000 extra homes constructed.
With regards to the negative gearing changes, only those properties negatively geared after January 1 next year will be affected, so those already negatively geared can breathe a sigh of relief.
Investment properties that are purchased after January 1 next year can only be negatively geared if they are new houses.
Capital gains tax concessions for investors who sell an asset after holding it for at least 12 months will be halved from 50 per cent to 25 per cent.
Labor has faced plenty of opposition to the proposed changes but appear steadfast in their intention to push ahead and introduce them if elected.
“We announced our reforms to negative gearing over three years ago,” Mr Bowen said.
“We’ve withstood the shrill scare campaigns and the apocalyptic warnings.”
“The political pundits postulated that negative gearing reform would be all too hard for any major political party, but we’ve argued the case.”
“A January 1, 2020 start date allows for around seven months, a sufficient amount of time to get the legislation in place before the changes come into effect.”
“That is what you’d expect from a sensible and responsible incoming government.”
