Welcome to Firstlinks Edition 663 with weekend update

Tony, I am so angry just as you sound, that I just know it is my anger that WILL keep me alive rather than a death-threatning illness. Sounds crazy, but I am so mad about the ruination of our country by a bunch of fools who can't add 2+2 to make 4.

Mark
I'm a former tax accountant and on that basis believe that negative gearing is an appropriate policy consistent with tax law.
In simple terms, monies received (eg. rent) in pursuit of profit are assessable income and monies expended (eg. interest) to derive that income are allowable deductions. If allowable deductions exceed assessable income, you have generated a tax loss on that asset. Enterprises that have more than one asset are allowed under tax law to use tax losses to reduce the amount of tax payable on profits from any of their other assets. A salaried worker has an asset in the form of their labour / knowledge.
Why should an individual be treated any differently to a company?

Hi Nadal. I'm not sure I follow your point. I think individuals and businesses should be treated differently because they are not the same thing. Also business and personal tax rules differ in many ways - starting with the rate of taxation. Tax policies are just choices made by governments and they can be changed. There are many inconsistencies in tax codes and these are often done to encourage or discourage certain activities. How is negative gearing any different?

A sole trader business such as tradies not taxed differently in their business (apart from how they collect GST for Govt & which rental owners pay on services rec'd). They pay income tax at same rates as rental owners do.

Nadal, I don't want to be too condensing, but it is very important you and ALP/Greens get a grip on capital versus income. You're not risking the latter are you when you take a salaried PAYG job? Aust will now has highest top MTR on capital investment in the world. I think you and others also need to get a grasp on how money works (human behaviour). It's already playing out in terms of market dynamics given this disincentivised being proposed.

Hi Nadal,

I’m also a Chartered Accountant working in tax.

Individuals starting a business can operate as a sole trader, partnership, company, or trust. Losses incurred in a company or trust generally cannot be used to offset an individual’s other income, as those losses are retained within the entity. Even for individuals operating in their own name, there are already strict non-commercial loss rules designed to prevent people from artificially generating losses to obtain tax benefits.

Negative gearing does nothing to benefit anyone other than the individual receiving the deduction. It artificially inflates property prices by encouraging investors to pay more for assets than they otherwise would. Taxpayers should not be subsidising poor investment decisions made by high-income earners.

Mark,

If only it was that simple. Looking at the big picture - is the government really committed or capable of getting out of the way?

-Taxes are increasing overall - this includes personal taxes, taxes on superannuation, capital gains, trusts.

-Overall government spending as a proportion of GDP continues to be higher than historical norms

-Spending on NDIS is still budgeted to increase above inflation next year - despite "reform".

-Housing construction remains substantially below the Governments own targets. Government policy/regulation contribute to this.

Productivity is not improving (and the RBA has consistently mentioned this). Government policies, and changes in workplace conditions of employment contribute this.

-Inflation is higher. Energy costs and rents/housing costs are significant contributors. Government policies contribute to this.

-Interest rates are higher. Government demand (and policy) contributes to this.

Mark, I am an older person (70) and generally agree the CGT 50% discount and Negative Gearing were issues that needed addressing to shift wealth building out of "Homes" and encourage investors to invest in more productive options. The snake in the grass presented in the budget last week is the intent of the Labour Government to tax anything they can lay claim to at a minimum of 30% outside of (a) Super Accumulation under the TBC and PAYG earnings under a miserable $45,000 annually. The budget did nothing to shift the dial on encouraging investing in more productive assets and did nothing to help small business (the $25,000 instant deduction sounds great but in reality is of limited value). A far more credible starting point would have been to reduce the magnitude of Government spending (waste less) and take the pressure off of increasing rates of taxation across the board. How voters will see this come next election will be the real test.

I too am an older person - but I'm a pre-boomer.
I agree that the 50% discount was overdone, and agree with indexation of the cost base, but with a % or two on top of the CPI to encourage investment - part of Australia's problem is the increasing preference by investors to go to more favourable economies.
It's claimed that the proposal takes us back to the glorious Keating years. Not quite: it's my recollection that the Keating capital gain laws allowed averaging over 5 years. That dealt with the lumpy nature of capital gains by spreading it. As I read the current proposal, there is no mention of averaging. If one makes (say) a $1m capital gain under the current proposal, most of that would be subject to 45% tax whereas if that was spread over 5 years at $200k/year, all of the gain would be taxed but only a small proportion would be subject to 45%.
These rules are a tax grab and will discourage investment.

Mark, I agree with those two positives. I'd add more, e.g. the moves they made to assist productivity such as making the standards free were good incremental moves. Locking in the business asset deductions was a good move that was kind of inevitable anyway, the Coalition was always going to do it anyway.

But you have to look at the whole picture. An Ice Cream scoop and cone with chocolate and berries on top laced with cyanide would still have positives - it would taste sweet and look nice. But you'd turn your attention to the overwhelming negative - that the cyanide would kill you.

The government is selling a turd sandwich. Without the turd (the CGT changes applying beyond residential property investors), it would be a good sandwich. ;) But it's not, it's a turd sandwich, at least until they back down under pressure.

My thoughts exactly.
What I am completely in the dark about regarding this budget is despite reading so many articles and watching so may interviews (including those with Albanese and Chalmers), I have still yet to come across any acceptable explanation as to why the CGT changes need to be extended beyond residential property and why there is a minimum 30% tax rate on capital gains. All I hear are the words "fixing capital distortion" with no further explanation as to how this applies to other assets apart from residential property.
The fact this government can't fully explain the cornerstone policy of this budget and the way they have introduced these major changes (i.e., outside an election) has given me no confidence at all as to what investment decisions to make. There is no certainty that a decision I make today will not be impacted by some random government policy that I couldn't even vote on. I suspect I'm not alone. Is this really how this government wants the people it supposedly represents to feel?

Lets be honest here there is no fundamental basis to add the highest CGT rate in the world other than Jim has succumb to Treasury policymaker influence. They'll do a fake news misformation on this but anyone can see its factually accurate. Indexing doesn't work unless you're in high inflation environment and trade off growth. All theoretically policies seem palatable to those that don't work in real world but in practice these same people don't have the slightest concept on market behaviour and the psychology of money. When you break trust in a system it has widespread ramifications. This is repeated each and every time.

As far as I understand it, the idea is that they want to bring capital gains taxes in line with income taxes, despite the fact that they are completely different taxes levied for completely different reasons. They view it as an inequity that some income tax rates are higher than some capital gains taxes, and therefore in the name of "equity" they need to level it all to the same rates. It's a political philosophy they seem to have invented for themselves some time between the last election and this budget.

But no one was asking for this levelling, they just schemed it up behind closed doors, and rather than taking it to the public for debate or getting a mandate for it at an election, they decided it would be a good idea to steamroll it through.

Their current campaign for it is appalling. I've seen the Finance Minister and the Small Business Minister on ABC TV either outright lie about it or misunderstand their own policy, e.g. when saying no business will be affected by the CGT changes when in face any business that is sold will have a new CGT regime apply. I don't know which politician came up with the idea just bullshitting the Australian people is going to be effective, but I don't think it's going to be sustainable.

Lee
good points. And journalists, including the ABC, have been obsessed with talking ONLY about the housing ...barely mentioning the probable impact on the share market. The Ralph Report stated that the purpose of the CGT on shares held for more than 12 months was to dampen the turbulence and churning. Technology has moved so much since then that without this incentive, the churning could increase a lot more - it is now so easy to buy and sell quickly.

And for those who have done what they wanted us to do - take the RISK of providing a rental property for others - now slammed with a huge change to the CGT equation, for an asset that is highly illiquid. Renting out a property has huge risks attached - tenants can cause expensive damage and good luck getting it repaid through the courts. Or squat in properties and be protected by laws that allow them to squat for a long time, whilst the owner bleeds money. Excellent way to destroy trust and deter people from making investment decisions - when the policies can be changed overnight.

Lee, not first time labour unable (or unwilling??) explain policy, stand-out is Bowen in national televised Sunday debate prior 2019 election when asked tto explain how franking worked as wished to remove Fr. Credit as part of election promise. He couldn't explain. Looked a grand idiot. Election won on that night for Coalition no matter who Coalition Leader.
Yet this person who couldn't explain simple franking credits his party wished to eliminate, is in charge now of trillions of $ re environment & alternative energy with only 31 days of national fuel reserve? Who on earth does he think he is? (All said without rude language)

Hellripphin, spot on ABC & risk bad renters, 23000 my last one, 9wks off market to make lettable as trady shortage/dovetail trades, 40% of income, therefore less income tax to pay our pathetic Govt. No skin re NG but skin for CGT existing rules, about 200,000 to date if sell for RAD lessening choice of where. Don't care as knew CGT when started when bought as is & income not otherwise had & no drain on Govt purse. However, read Noel Whittaker article today local paper, RAD not counted as a 'home' ( maybe 1 million +) but included in Inc & asset test so higher daily service charge I think term he used.
Now tell me how this is fair generational equality being rammed down throat by labour? On top of coughing up 200,000 tax if sell?? Can't be assed any more (mis-spelled on purpose) when see PM's face on TV murdering the English Language so badly too. That was it for me after Noel's article, just employ cleaner, gardener, meals on wheels. I'm done. Will just wait for bullet when they choose our lives no longer useful but at least die at home in comfy chair as what other step can they take?

"However, read Noel Whittaker article today local paper, RAD not counted as a 'home' ( maybe 1 million +) but included in Inc & asset test so higher daily service charge I think term he used."

Correct.

Under the new system there are two means tested care fees in addition to the Basic Daily Fee of $65.55 p.a. ($23,926 p.a.)

The NCCC or Non Clinical Care Contribution which is capped at a maximum of $107.32 p.d. ( $39,172 p.a.) and features a lifetime cap of $137.917 or 4 years in care (whichever comes first). However indexed IAW CPI twice yearly.

Plus the Hotelling Contribution: This contributes toward everyday hospitality costs like meals, cleaning, and laundry.The Cap: This is capped at a maximum of $22.15 p.d.($8,8085 p.a.). No lifetime cap.

The RAD (even though inaccessible for income) is an assessed asset for means testing purposes for aged care fees but not for Centrelink pensions eligibility (if applicable).

Aged care has become very expensive and getting more difficult to provide for courtesy of the proposed tax changes!

Great comments and you are doing well as editor keep up the great work. I for one am happy to pay for a reformed NDIS housing health and education. Many have become too greedy.

Thank you Margaret. Really appreciate the kind words

Thank you Mark for this article Your points are well made, particularly in respect of negative gearing on residential property. Nice to see some balance. Keep it up!

Thank you David

Mark
I’m not quite sure of your argument.
We are hugely short of new housing, and for existing housing affordable to first-home buyers.
The budget proposal will result that most investors with negative gearing will now keep their investments for as long as it suits their tax position. A few may sell, most, particularly in Sydney/Melbourne, would be unaffordable to first home-buyers. A very slow improvement for first-home buyers.
The Government needs investors in new supply. They will not do this without incentives, and higher rentals, and they will be reluctant anyway as they will be really only selling to first-home buyers, so there are major aspects of location risk. A very limited prospect of increased supply.
In the meantime the Government increases the immigration program, being inconsistent with it’s housing supply objective. Go figure.

I agree John. This is an incremental step that will take a long-time to play out - as you said people with grandfathered negative gearing will likely hold onto their properties as long as possible. I also agree the primary issue is supply and demand and if the population continues to grow through immigration something needs to be done to increase supply. That is going to be really tricky given how much building costs have increased and other factors like resistance to new development in inner city suburbs. This is no way solves the problem and I think many of the claims by the government overly optimistic. As I tried to point out I'm not fan of the budget in totality and was just trying to find some policies that I thought were good.

Mark LaMonica, to be clear, no vested interest NGearing. There are naysayers of NG but what overlooked is principle that private individuals use after- tax capital savings for deposit and after-tax income for expenses (more of below)) which provides a home for those who don't have one and need to rent for whatever reason. It's not a 'class' issue, it is merely a financial transaction matter. It will get to stage without N/gearing, fewer rental homes will be provided via private finance. A person is providing a financial and social service that cannot otherwise be met currently by other methods, eg govt social housing or fast, cheap, new homes for young people to buy now. The latter is not a private investor's fault. The Govt wants to cut those providers off at knees. How will it deal with increased homelessness? Charities can barely cope now with the issue, imagine future when indiviuals won't buy established homes due to huge imposition on their personal financing. New homes aren't built fast enough to solve crisis. People will buy new homes to invest due to full NG but it can't all come to fruition by 1/7/27 to solve already existing problem by then.

Simple eg.for owner costs, 1 bed unit Sydney @ 650,000, loan of 585,000 @ 6%, managed by an agent.
Let's not look at lost opportunity cost.
Rent 31,200p.a. Fair example of expenses is 10,880 + Interest 35,100= 45,980
Difference= 14,780 (of after-tax income). 10yrs = 147,800, recovering that if gain if sold in 10yrs.
Owner on 30% tax rate. With 14,780 "loss", reduces tax bill by 4434.
Owner has subsidised a person's home with, 'loss' 14,780 - 4434 tax saved = 10,346 p.a (from after tax income).

Same eg below using same figures if becomes "positively geared", daft expression for fully owned as no gearing involved. Again no look at lost opportunity cost.
Rent 31,200, Expenses 10,880 = 20,320 "profit" on which 30% tax is paid = 6,096
The tax deduction of expenses in return is only a saving of tax of 3264 (10,880x30%), imagine as if you didn't have the unit, you would not have had the expenses, so it's a subsidy to provide home to renter. A way of looking at is, you paid expenses 10880 - 3264 re tax saved by the expenditure of the whole, so owner paying the other 70% of expenses = 7616 every yr. (if same figures, won't be as things wear out so R & M higher).

When people realise, how is it attractive to be a private subsidisor of finance to rental homes, whether N/geared or fully owned and particularly when interest on loan is disallowed on established homes? Thus why it has become a 'social service' to the Govt & country. Govt mad or don't understand the figures of how it works is more like.
It's not elitist to aim to buy a rental property, if everyone did we wouldn't have current problem, quite the reverse. How has N/gearing removed risk as you said? A person may be made redundant, bought in wrong place and hard to rent or a renter loses job.

Thanks Lyn. I don't think ambition to own proporety (investment or otherwise) or financial assets is elitist or in anyway bad. My main concerns with the budget is that it is an attack on ambition. However, on the singular point of negative gearing I'm supportive.

I understand that negative gearing encourages private investors but I think we need to look at the trade-offs. For instance, other countries have forms of encouragement for private investors in residential real estate but nothing to the degree of Australia. Those countries have houses and rental units. And yet Australia has three cities in the top ten most expensive real estate in the world (Sydney, Melbourne and Adelaide) - why is that? It isn't all negative gearing or maybe even mostly negative gearing but it still contributes to the disconect between the cash flows a property provides and the price of that property. This disconnect is funded by tax dollars ($10.4 billion in 2022 / 2023) and I do think it is reasonable to detbate that question. I happen to think the policy needs to be changed and others disagree - I respect those opinions and admit I may be wrong.

"People will buy new homes to invest"

But the concessions will not apply to established areas where people actually want to live unless a dwelling is replaced by at least two new dwellings and a lot of that may be too expensive for first home buyers in any event. Building in non established areas could be less expensive due to land being cheaper but due to escalating costs many developers may still need existing stock to rise in value to make new builds viable. This may only happen if there is more demand for existing stock which the budget is now discouraging. It remains to be seen whether retaining the concessions for new builds going forward will be sufficient to offset the negatives including valuation shortfalls (paying a developer premium for a property that appraises for less upon completion), builder insolvency, building defects, construction delays, and high depreciation rates on the physical building.

Lyn, a great comment.
I have always said that the losses that an investor makes on their property are subsidised to some extent by the government / taxpayers paying some of that loss (in many cases only 30% on a 30% tax rate) to encourage private individuals to invest in a property to make them available to rent to those who cannot afford to buy. This may well be retired people who, maybe through misfortune, have been unable to buy a home.
The other overlooked fact is that I have been able to build my asset base over 50 years so that I do not draw any benefits from the government in the form of pension, health benefits etc. I hope that can continue until my death when I hope we can assist our children so that they do not have to be dependent on the government /taxpayer.

It is standard practice for a business to deduct costs from income. The difference is either a profit or a loss. The profit is taxed and can be distributed to shareholders or it can be reinvested to grow the business and future profits. A loss is locked in the business. It cannot be passed to shareholders and can only be deducted from future income.

But landlords are not businesses. With negative gearing, landlords can deduct their investment losses from their salary income and thus reduce their personal tax. With progressive marginal tax rates the largest tax deduction flows to taxpayers with the highest income.

Clearly the taxman is subsidising the landlord’s costs. That begs the question: Is that a subsidy to the landlord to improve their investment return, or is it a subsidy to the tenant to make their rent cheaper? In the absence of negative gearing, will rents need to go up so that landlords recover their higher costs, or will house prices need to fall to make existing rents a more profitable investment return?

If tax incentives are indeed necessary to encourage private investors to provide rental accommodation for tenants, in the absence of government provision, what form of tax incentive should that be?

I agree Lauchlan - just trying to point out a few positives. I also agree with your points and should have mentioned them. In the presentation I mentioned from Luci she made another good point - it isn't the government's job to make the economy more productive - they just need to get out of the way. Businesses need to do the heavy lifting.

Right! As a broader point, the government needs to reframe from productivity to entrepreneurship.

Productivity is an efficiency game - getting more output with the same input.

What matters, of course, is doing the right thing in the first place - which in the commercial world is creating more value to the customer and getting paid accordingly more for it.

The activity that creates value is entrepreneurship, and that's where we should focus our national efforts on (in my view).

Mark,
Your comment of not understanding Negative Gearing is interesting.
Not sure where you were before by our Govt does not provide housing but no investor will buy a house with say a 2-4% rental return on it own so Negative gearing was the way too subsidise buying to rent. That together with previous accelerated depreciation provided the rental market until the Govt mismanaged migration
Don't think it is hard to understand.

Hi Pacsun - I think the counterargument is that negative gearing has caused rental yields to be 2 to 4% by pushing up housing prices. Effectively negative gearing has taken away much of the risk of owning an investment property. If the property is vaccant nothing happens as other tax payers cover the shortfall. If rents fall nothing happens as other tax payers cover the shortfall. Just like with a bond when risk is low, yields are low. When there is greater risk investor demand higher yields to compensate them. Negative gearing distors the housing market like an incentive. People can argue over the positive or negative nature of that distortion but it still exists.

"negative gearing has caused rental yields to be 2 to 4% by pushing up housing prices"

But NG has been in place for a long time (except for about two years in the 1980s when it was removed and then reinstated) including when housing was more affordable relative to wages. What about the impact of: cheap debt (real interest rates near zero or negative during specific historical periods driven by high inflation or emergency central bank policies) which drove up asset prices, imbalance between supply and demand due to multiple factors including higher immigration, higher government regulation and taxes, over-reliance on the private sector to deliver social and affordable housing, shortage of skilled labor in part due to govt demand on big build projects, significant building cost inflation, etc.

Mark, you feel NG caused rental yield to be 2-4% pushing up home prices & NG removed risk investing in rental home. Using your eg.of bonds re yield/lower/ greater risk, look at the statement in Budget 2026 re help supply chains in manufacturing etc from National Reconstruction Fund Corporation (NRFC) with interest free loans, online research shows loans < 5mil, application start date was 20/4. W/site info infers loans to be repaid in 2yrs, at most 7. No details on interest-free repay. NRFC states benchmark return expected on loans is usually 5yr bond rate over medium to longterm, PLUS 2-3%. Last RBA bond figure quoted ...4.68%, so it's OK for Govt to usually expect 6-7-8% ROI but not private investor of rental home to expect 2-4%? That's hypocritical when taxpayer funds used for NRFC achieving such return & now intend to punish rental investors buying existing property for even lesser ROI. Govt really needs to live within its' means as rental investors do to become investors in first place.

Not against helping business as needed now. At 30/6/25 NRFC total Cash & equivalent was 1,585,269,000.00 against 46,768,000.00 in 2024 so Govt should help in current situation to secure local supply of goods instead of imports. Too long to sift Fin S/ments to determine where extra cash from, not find straightforward Inc & Expediture S/ment as expected, a covoluted way presented. The point is if not offering interest-free they would have expected about 6.68% ROI of approx 105.9 mill in 25/26.
Take prior eg of Unit @ 650,000 fully owned @ 4%=26,000.
20,320 profit - 7616 (70% of exp owner bears) = 12,704 = 1.95% ROI before tax, how can anyone think it's a you - beaut investment? Not bother with calc on NG'd as will depress people more about buying established property after 1/7/27, if passed.

For all those people whinging about the capital gains tax, can anyone explain to me why earnings from capital should be taxed less than earnings from labour?

Notwithstanding that your term "whinging" is somewhat offensive (is not robust open debate healthy?), the fact that invested capital has already been taxed, saved (consumption forgone) and then invested at risk, without a guaranteed return, surely warrants taxation at an incentivised rate?

High tax rates on investment returns discourage individuals from saving. Lower rates incentivise citizens to invest in businesses, which funds innovation, creates jobs, and boosts long-term economic productivity.

Most OECD countries tax capital income (such as dividends and capital gains) at lower effective rates than labor/wage income. Financial capital can move to countries with lower tax rates. Keeping investment taxes low prevents capital flight and keeps domestic economies competitive.

Labor's proposed change to CGT will make Australia's the highest in the developed world! Currently 23.5% for high income earners and proposed to become 47% for those on the highest marginal tax rate and a minimum of 30% for all.

Comparable rates of CGT:
Denmark 42%, Norway 38%, France 34%, Canada 27%, Germany26%, UK 24%, USA 23.8%.


.

James/ I’m not disputing anything you are saying but my understanding is that capital gains tax mostly benefits wealthy individuals. Businesses wishing to invest , which funds innovation, creates jobs, and boosts long-term economic productivity are not affected and also have plenty of other tax deductions. Personally I see the vocal few as mostly rent seekers that want to get a tax concession that is not available to wage earners. And it’s not sour grapes as the other responder has intimated - I’ll just be selling my shares and take the concession while it’s available and hold the same shares in super which is taxed at 15%. And if you have so much money in super that you have to pay 30%, I’ll cry a few crocodile tears for you.

Obviously because to have capital you normally were taxed on your income before you had the balance to invest. Sounds like sour grapes Michael.

Removing NG & CGT changes may slowly reduce house prices, but higher interest rates, cuts to home-buyer subsidies and tighter bank lending would also slow prices. Temporarily reducing immigration numbers and increasing housing supply would also assist greatly.
Increased low-rise and affordable apartments in desirable locations would sell themselves. It's not that hard, supply and demand is a pretty basic economic tenet.
The sadder truth is we've gorged and grown fat on higher house prices and nobody wants the party to end.
There also seems to be a train of thought, that all Capital is insidious and has been easily won through backing "favourites" or by purchasing the correctly numbered Tattslotto ticket.
In my experience, most Capital is hard earned. It's the squirreled away remainder of wage income, interest and investment income and Capital Gains income built up over years of hard graft.
A reward for effort and risk taken. Some rewards great, some less, some missed altogether. But all rewards taxed, in one form or another, under the prevailing Taxation accounting parameters.
I was told, when young that "Money may have been made round to go around, but it's also made flat so that you can stack it".
Stacked up capital can then be put to work to create businesses, create wealth or to provide for retirement. It can also, just be put aside for the proverbial rainy day.
It now would appear that with storm clouds on the horizon, it would appear the current Government are searching for Tax-shaped umbrellas. Perhaps they, and preceding Governments, should have stacked some away.

Mark it is quiet simple and it is all in the name that is wrong, "negative gearing". Expenditure incurred in earning your income is an allowable deduction to income earned that is the principle.
When it comes to housing affordability I recall the days of no CGT, no housing shortage and houses were affordable. This housing affordability is in all OECD countries and has nothing to do with CGT or being able to deduct expenses against income for it is all about high immigration, supply and a host of other variables.
Correct me if I am wrong but foreigner's do not pay CGT on in investments to encourage investment in Australia but then why tax Australian citizens investing in Australian companies? Bring back no CGT for Australians.

Paul - expenditure incurred in earning your income is an allowable deduction because the tax laws say it is allowable. Tax laws were not ordained by some divine being and they are not proscribed in the constitution. They can be changed and as I said above tax laws don't have to be consistent. As someone who moved to Australia I can tell you that non-Australian citizens pay capital gains taxes. I paid them prior to becoming a citizen.

I agree and said that negative gearing is not even close to the only factor in housing prices but I do think over the years it contributed.

I should have been more specific Mark;
A foreign resident does not pay CGT on assets that are not “taxable Australian property”.
This means no CGT on:
Shares in Australian companies (e.g., BHP, CSL, banks)
Units in Australian managed funds / ETFs (unless they hold mostly Australian real property)
Bonds, cash, derivatives, and most financial instruments
Cryptocurrency
Foreign assets (obviously)
This exemption has been consistent for many years.

The idea to only allow negative gearing in the future to new construction sounds good superficially but it misses the demographic problem biggly. Simple example, I and many others at university rented, in my case around Randwick and Coogee near UNSW. Just where will the new construction be for landlords to purchase? If landlords all move to the outer suburbs to find new houses to buy and rent are all the inner city renters to mass commute? This cannot work.

I would like to see someone who is a qualified tax accountant calculate the impact of a compulsory 30% CGT on those on the marginal tax rates,
2026 Tax free threshold (TFT) $18200 Nil $18,201 – $45,000 16c for each $1 over $18,200
2027. TFT (NIL) plus 15c $18,201 and $45,000. and is reduced to 15%.
2027–28 TFT (NIL) plus 14c $18,201 and $45,000.
And whether the 30% minimum CGT will wipe out the TFT.

To Lapsed, perfectly put to round off the week.