Federal Budget: Australia’s major capital gains tax discount change explained | #yahoonewsau

Subscribe and turn on notifications🔔 : https://buff.ly/3F6ZiLt | Treasurer Jim Chalmers has unveiled the long-anticipated major capital gains tax and negative gearing changes in the Federal Budget. Here’s what that actually means.

Capital gains tax is the tax you pay on profit when assets, such as investment properties and shares, are sold.

The current 50% capital gains tax discount means that if you sell your asset after owning it for 12 months, you only pay tax on 50% of the profit you make.

In the budget, the government confirmed the CGT discount will be replaced with a discount based on inflation and they will also introduce a minimum 30% tax rate on capital gains from July 1, 2027.

The change means investors will pay tax on all their gains, minus inflation over the period the asset was held. Investors in new builds will be able to choose the 50% CGT discount or the new arrangements.

The government will also limit negative gearing for residential property to new builds from July 1, 2027, with existing arrangements to be unchanged for properties held before budget night.

Since the CGT discount was introduced in 1999, house prices have increased by more than 400%, which is twice as fast as full-time incomes. The government has estimated that 75,000 Aussies would be helped to buy their first home over the next 10 years under the tax reforms included in the budget.

Read more: https://au.finance.yahoo.com/news/federal-budget-capital-gains-tax-discount-change-revealed-for-millions-of-aussies-094722409.html

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