When the 50% concession on CGT came in for assets held for longer than a year, indexing the cost base for inflation disappeared.

If you make a dollar on selling an asset, you are taxed at half your marginal tax rate, regardless of how long ago the asset was purchased.

Some lose out under this tax arrangement when the asset they purchased for $100 in 2005, say, sells today for $110. $100 in 2005 money is $130, or more, in today's money. Yet the taxpayer is taxed on a $10 capital gain when, in real terms, he has lost money.

In some areas of Australia, property values haven't moved for 10 years, or maybe rose and fell. Why should a loss in real terms, be taxed if the owner sells today?

Now Labor wants to exacerbate this occurrence by reducing the CGT concession to 25%, without re-introducing indexation of the cost base.

To both parties, let's have a CGT, but make it fair.

Totally agree.

CGT should be 100% like any other income: it should not even be separated from regular income tax - but loss due to inflation is a legitimate deduction on profit.

The reason CGT was halves was to encourage investors to seel the asset, to buy another, in other words, stimulate the building industry.

It stands to reason that if you half the CGT concession and remove NG on used houses, you also remove the enticement for investors to buy another house, simply because they will be punished for selling the previous one.

If labor wins government there will be a mini boom on housing, especially used ones with attractive NG prospects but this boom will collapse if and when the get their policy through. (will never happen in my opinion)

So people will not sell used houses due to CGT, and why would they will NG in place. Rents will increase even if only in time, simply because values of a new home being resold will be unknown, meaning less replacement stock.

This truly is a dumb policy.

Personally, I will be using my after tax dollars to debt reduce rather than risk new investments because unlike new investments, where second hand values will be unknown, my savings will be real as I know what my interest rates will be.

"If labor wins government there will be a mini boom on housing,..."
Can't see why if house prices will then be suppressed when the policy is enacted, butch.

With the banks now refusing loans to overseas real estate buyers there
might be a significant drop in house prices.

"If labor wins government there will be a mini boom on housing"

No. Weakness is already being seen in the housing market and Labor's speculation must be eroding confidence.

If these cynical SOBs with their Class War against 'landlords' who are mainly mums and dads investors cause a run from housing investment it will be nigh on impossible to arrest. It is all about confidence because investment in tenanted property is high risk and low return.

There is also the 'White Shoe' confidence trick (supported by Labor's spin!) that properties can be sold for a profit when the investor is constantly tipping money into the high maintenance, depreciating asset and the only illusory 'gain' is due to inflation (but actually deflation in the value of money).

Two questions:

first, what new rental housing might actually be sold for a profit in real terms after (say) ten or fifteen years; and,

secondly, what sort of business must rely on the sale of the business to have any prospect of one day returning the amount invested to the investor (let alone some reasonable return for risk and lost opportunity)?

Labor and ors are deliberately avoiding any discussion of the viability and sustainability of rental housing. Instead they are spinning Marxist class war against 'wealthy landlords', and property speculators who run very high risks and are often bankrupted in the process.

It is a media circus.

The reason there will be a mini boom is because owners of high end properties that are pos geared will be looking to cash in while the 50% CGT concession applies, while those wanting to lock in a negatively geared property prior to changes will be looking to buy.

As an example, a property purchased years ago for $300K, is now worth $650K, yet rents for $30,000/an has no NG credits, however, if one borrows $700K to buy it, still receives say $40,000 in rent now has a negatively geared asset.

This is what I see happening.

Sorry, I forgot to add, it will all depend on the outcome of the election.