Clicky

Labor’s negative gearing policy to apply to all investments

The Tax Institute said it has received confirmation from the Australian Labor Party (ALP) that its proposed changes to negative gearing would apply across the board to all investments, after it was widely thought that the negative gearing restrictions might only apply to property investment.

However, Professor Robert Deutsch, Senior Tax Counsel with The Tax Institute, said the overall impact of Labor’s negative gearing proposals is not likely to be nearly as draconian as some sectors seem to be suggesting.

“The good news is that the proposed restrictions to negative gearing would apply on a global basis to every taxpayer,” Deutsch said. “This means that Individual taxpayers would need to look at the totality of their investments.”

Related News:

“For example, if the total of the interest and deductions related to investments exceed the investment income, the excess will not be able to be used for offset against other non-investment income.

“This excess will need to be carried forward for offset against future investment income or capital gains. Importantly, you will not have to look at each individual investment, or at any particular asset class – that would have been a very onerous and cumbersome exercise.”

Professor Deutsch said the policy would continue to allow people to hold for example, four, five or six properties with some positively geared and some negatively geared.

“Provided the overall positives exceed the overall negatives, there will be no problem. For investors, this is at least some good news and actually brings us into line with what happens in many other countries, for example the United Kingdom,” he said.




Related Content

SMSFs should look to industrial property

As banks cease self-managed superannuation fund (SMSF) loans for residential property, alongside a downturn in the housing market and potential change...Read more

Residential property buyers beware in 2019: RiskWise

Tighter lending standards, the results of the Banking Royal Commission, potential changes to negative gearing and capital gains tax and unit oversuppl...Read more

Housing indices faced tough year post-RC

It seems the Royal Commission has had a negative impact on more than just the banks and advisers, with the housing sector taking a big hit in 2018 and...Read more

Comments

Add new comment