Housing supply and affordability is front and centre for many of us, and now it is being suggested that proposed changes to the Capital Gains Tax may actually make things even worse.
Mark Henderson, ‘Hendo’ from Monday Morning Matters, interviewed local property advisory businessman Gianni Musumeci on the 16th of February, discussing his perspective.
According to the Australian Government’s Taxation Office, “Capital gains tax (CGT) is the tax you pay on profits from disposing assets including investments, such as property, shares and crypto assets”.
Musumeci explained how the Australian Government is currently considering or at least modelling around our current laws regarding Capital Gains Tax.
“If the capital gains discount is removed altogether, and there is no sort of grandfathering or any consideration taken into account that as an investor, I’m more reluctant to sell my property because I’m going to be looking at selling it further down the track when I don’t have such a high taxable income. And that would actually reduce the supply of property, because as an investor, I’m less inclined to sell my property,” Musumeci expressed.
To further, Musumeci explained how our society is currently in a “supply crunch” from a rental and purchase perspective as there is “not enough to cater for the Australian population.”
As our capital growth continues to sky-rocket, we will see increased pressure on rents, as supply properties are scarce.
However, Musumeci explained we shouldn’t stress as the Australian Government has “been talking about changes to the Capital Gains Tax Legislation for, I’m gonna say decades, and I wouldn’t panic because there is a number of people that are considering selling because of the talk…I wouldn’t panic until they start tabling it in Parliament.
Have a listen to the full interview below!