Negative Gearing

Dec 15, 2015 | Accounting & Tax, Business

Neil McDonald

Both the Liberal and Labour party have hinted at possible changes to the rules regarding negative gearing if elected to government at the next election.

Under Labour’s proposed policy, after 1st July 2017 only newly constructed homes would be eligible to be negatively geared. Properties purchased before 1st July 2017 would be exempt from the changes to the rules.

The Liberal Party have indicated they will target “excessive” use of negative gearing. This could mean limiting the number of properties that can be negatively geared or capping the amount of the deduction that can be claimed.

Labour has also hinted that the capital gains tax discount on sale of a property purchased after 1st July 2017 and held for 12 months may be reduced from 50% to 25%. This would effectively increase the maximum capital gains tax rate from 24.5% to 36.75%.

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