In an announcement on Saturday, 13 February 2016, Labor Leader Bill Shorten released Labor’s “Funding Health & Education – and Balancing the Budget” policy. The policy proposes to:
- Limit negative gearing to new housing from 1 July 2017. All current investments – and any made before this date – will not be affected by this change and will be fully grandfathered. He said that in 93% of cases, investment loans are used for purchasing existing properties and that does not create new housing stock nor new jobs. From 1 July 2017, taxpayers will continue to be able to deduct net rental losses against their wage income, providing the losses come from newly constructed housing. Under Labor’s policy, 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.
- Halve the CGT discount from the current 50% to 25% for assets purchased after 1 July 2017. All investments made before this date will not be affected by this change and will be fully grandfathered. This change will also not affect investments made by superannuation funds. The CGT discount will not change for small business assets. There will be no change to CGT rules on existing assets and personal superannuation, and the family home will remain CGT free.
[Labor announcement]