The recent Australian Federal Budget introduced changes to Capital Gains Tax for all asset investments, including property, removing the previous 50% tax free discount and replacing it with a tax free allowance for inflation uplift.
Furthermore, changes to Negative Gearing, the ability to offset property holding costs against tax payable on other income, have now been limited to investors that acquire newly constructed properties only.
Despite the Government's claims that these changes are good for the country, general market sentiment has been negative, and falling auction clearance rates and softening, declining values across the country are being experienced.
Fear of a market collapse is real and rampant across traditional and social media channels, creating nationwide paralysis, with buyers sitting on the sidelines waiting for lower priced expectations to arrive.
Do these changes really mean an impending period of crisis and concern for the property market, despite the strong returns of recent times, or will the underlying market forces of low supply and population growth be able to support the market in the long term?
In this video Steve Douglas, Executive Chairman of SMATS Group, examines:
- The impact of the Budget changes and how they impact owners and investors
- The current market factors impacting returns
- Whether the underlying facts support a property crash
- What are the key drivers of the market, both upwards and downwards
- Whether more pain or more opportunity will evolve in the coming months
- How to understand and take advantage of the new tax position on property
