Looking into 2021 the next change that could affect Queensland and the national property market is the potential for tax reform for property investment.
Labor tax proposals proposed by Manpower include:
Rollback (excluding newly built houses) from "negative transmission"; and
Reduction of current capital gains tax (CGT) for investors from 50% to 25% – negative transfers are discounts that allow real estate investors to offset the loss/interest on their taxable income.
The proposed changes will be "forced" and therefore will not affect investors with existing properties with negative features.
Opinions differ as to the impact on general housing prices, affordability of first-time buyers, and home rent.
The cashier recently issued a warning: "If you own a house, it costs less. If you rent a house, it costs more. Financial Models released earlier this year found that the impact of labor reforms on domestic values is likely to be weak.
About 1 in 3 settlements where Nxt Legal operates is for investment property.
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Customers who currently own investment properties or who purchased prior to the possibility of tax reform may be able to convince themselves that the negative accumulated benefits remain on their investment.
For your clients buying or selling investment properties, Nxt Legal offers a free contract review by one of our real estate attorneys before signing a contract to ensure your clients know where they are.