A Labor government would scrap negative gearing concessions for new investors on January 1 next year, earlier than many analysts and commentators predicted.
Shadow Treasurer Chris Bowen said the long-awaited start date would still provide enough time for scrutiny of the legislation and more industry consultation.
He again dismissed calls to delay or phase in the change, which is a key point of difference between Labor and the Coalition before a May election.
"This allows it to come in at a quieter time in the property cycle — obviously Christmas and New Year being a quieter time — a good smooth time for implementation,"
Mr Bowen said.
"This strikes the right balance."
The change would stop new investors from deducting rental losses from their income tax bill, raising an estimated $2.9 billion over four years.
Federal Labor has argued this concession is too generous and is unfair because it makes it harder for younger Australians and first-home buyers to enter the market.
Ending the tax concession on January 1, rather than July 1 as many expected, would mean a Labor government begins to collect a share of that $2.9 billion earlier in its first term.
Mr Bowen also argued that delaying the change until property prices recovered from a recent downturn in capital cities would only increase market uncertainty.
"At the last election we said it would come into force 12 months after the election, this time we are saying seven months and they are roughly comparable timeframes,"
Mr Bowen said.
"This enables proper legislative processes, draft legislation, proper consultation about how the legislation should be framed."
RealRenta Landlords are going to be better placed to withstand the changes to taxation policy.
Here are some tips from our most experienced investors, to help you navigate the anticipated consequences of this policy:
•Raise your rents when leases are renewed
• Add value to your existing properties to bring in higher rental yields
• Accelerate your depreciation- speak to your accountant about this
• Above all, use RealRenta to self-manage your portfolio and save thousands in property management fees.
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Friday, 29 March 2019