By Graeme Salt
This budget really created winners and loser.
It is a first step in tilting the balance in favour of younger, working Australians trying to buy their first home.
For decades, the housing market has been geared in favour of older investors such as me.
The budget will sweep away many of the tax incentives we have enjoyed in the property market notably by:
- Removing new negative gearing – apart from new properties
- Winding back capital gains concessions after 1 July 2027
Personally, this is bad news for me. I am now facing a much higher tax bill when I sell my property portfolio. Thankfully I have also been salary-sacrificing into Super so will be fine.
But it may well be good for the younger generation (who currently find themselves priced out of owning their own home).
While the impact on property prices is likely to be muted, with Treasury estimating prices will be 2 per cent lower than otherwise, the budget’s real legacy on housing will be defined by its attempts to boost housing supply.
A new $2 billion Local Infrastructure Fund will pay the states to loosen restrictive planning laws and boost construction productivity.
The Grattan Institute’s previous research has concluded planning reforms are key to unlocking more well-located homes and have the potential to boost housing construction by more than 60,000 homes each year.
Of course, I am not discounting the legitimate CGT concerns of those who have built up their businesses, nor those who use testamentary trusts as part of estate planning.
You may be a winner. You may be a loser (like me). But most of agree we need to make it easier for kids to buy a home.
Graeme Salt is an award-winning mortgage broker. For a no-obligations consultation on your home loan needs, please contact him on 02 9922 5055.
