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Falling property prices complicate new capital gains tax rules for investors

Property investors struggle with new capital gains tax rules amid falling prices and a 30 percent minimum rate starting next July.

Updated 1 min read

Published by Agyata NewsroomEditorial policyCorrections

Key points

  • New capital gains tax rules apply from July next year with a minimum 30 percent rate.
  • Assets acquired before July 1 will use that date's value as the cost base for calculations.
  • Valuer Gavin Hegney states about 40 percent of recent property buyers were investors who have now disappeared.

Why it matters. The changes determine how investors calculate capital gains liabilities and may allow them to use locked-in losses to offset future profits from asset sales.

Updated Sources: Thewest

Property investors face confusion over upcoming capital gains tax changes due to falling asset values and a new 30 percent minimum rate. Experts warn that assets bought before July 1, 2027, will use that date's valuation as a cost base, potentially locking in losses to offset future gains. Valuer Gavin Hegney notes that roughly 40 percent of recent buyers were investors, a group now largely absent as some property values could drop by 20 percent.

Latest updates

Falling property prices complicate new capital gains tax rules for investors

Australian property investors are struggling to navigate a complex intersection of new capital gains tax rules and declining asset values. The upcoming changes introduce a minimum 30 percent tax rate on gains, which investors fear will be particularly burdensome given recent drops in property prices. Many individuals find themselves in a difficult position where the combination of lower sale prices and higher tax rates significantly reduces net returns. Industry experts warn that the calculation of gains under the new framework could result in substantial liabilities for those who bought property in previous years. This situation has created widespread confusion and concern among the retail investor base regarding their future tax exposure.

Thewest

Sources

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