Read this information now to save big dollars.
Hurry you have less than 90 days to act.
With the federal election looming and significant changes to Capital Gains Tax and Negative Gearing, if the Labor Party wins office, the clock is ticking on your last chance to take advantage of the current tax benefits.
Labour has announced they will cut the Capital Gains Tax benefit in half and limit Negative Gearing.
What this means for you as an investor is…
If you sign a contract for an investment property before the earmarked changes you could make substantial savings.
For example: if your current investment property has a $500,000 gain once sold, you will pay $37,500* in Capital Gains Tax. If you purchase after the change and realise the same gain down the track you will pay $56,250* in Capital Gains Tax, almost $20,000 extra out of YOUR OWN POCKET.
The good news is, you don’t have to settle on an investment property before the change occurs as existing contracts will be grandfathered into the existing legislation. What you do HAVE TO DO is have a contract signed prior to the change taking place.
In summary, with current legislation, the losses from new investments in shares and existing properties can still be used to offset investment income tax liabilities. These losses can also continue to be carried forward to offset the final capital gain on the investment.
Therefore, now is the time to purchase that long wanted investment property but more importantly, at least have a signature on a contract even if the property doesn’t register or settle for several months.
With less than 90 days left, if the election is called no later than 18th May, you are running out of time to take action because putting it off until tomorrow could cost you thousands of dollars in tax if a new government gains power.
Please call on 0437 890 831 or email me [email protected] with your questions around this potential legislation change and how it may affect you and your property portfolio.
*Disclaimer: The CGT example above is based on a 50/50% ownership with a tax rate of 30 ¢in the $ and should not be used as an exact measure, as the figures are yet to be confirmed and are subject to an election result.