Labor announces date for negative gearing, capital gains tax changes if elected

NEGATIVE gearing and capital gains tax will change on January 1, 2020 if Labor wins the upcoming Federal election.

From that date negative gearing will only apply to new properties, while all existing negatively geared investment properties will be fully grandfathered.

The capital gains tax discount will be halved for investments entered into after January 1, 2020.

Shadow treasurer Chris Bowen said Labor would be a government that prioritised housing affordability, put first-home buyers on more of a level playing field with property investors, and reformed an overly generous property tax system in a way that was fair, more sustainable and boosted housing supply.

Mr Bowen said the Independent Parliamentary Budget Office has costed the policies, which would raise $2.9 billion over the forward estimates (to 2022-23) and $35.1 billion over the medium-term (to 2029-30).

Labor also announced it would revamp the Build to Rent scheme.

Mr Bowen said it would give institutional investors better tax concessions, encourage more construction and stimulate the housing market.

“We will cut the managed investment trust withholding rate in half, on tax distributions attributable to investments in build-to-rent housing,” he said.

“The rate will be lowered from 30 per cent to 15 per cent – encouraging new housing supply.

Mr Bowen said Build to Rent would provide more stable long-term tenancies and more housing in desired locations close to public transport and employment opportunities.

“Boosting affordable and stable rental accommodation has a double dividend – it is critical for Australia’s 2.7 million renters that can’t afford to buy a home or are saving to do so, and it boosts construction jobs and economic activity,” he said.