The Institute’s senior counsel, Professor Robert Deutsch, has announced that he had confirmed with Labor that the proposed reforms will apply to all forms of investment.
"The overall impact of Labor’s negative gearing proposals is not likely to be nearly as draconian as some sectors seem to be suggesting.
The good news is that the proposed restrictions to negative gearing would apply on a global basis to every taxpayer,” said Professor Deutsch
According to Professor Deutsch, taxpayers will need to consider the entirety of their investments.
"For example, if the total of the interest and deductions related to investments exceed the investment income, the excess will not be able to be used for offset against other non-investment income.
This excess will need to be carried forward for offset against future investment income or capital gains.
Importantly, you will not have to look at each individual investment, or at any particular asset class – that would have been a very onerous and cumbersome exercise,” he said.
"It would continue to allow people to hold, for example, four, five or six properties with some positively geared and some negatively geared.
Provided the overall positives exceed the overall negatives, there will be no problem.”
Thursday, 7 March 2019