Australian budget 2026 CGT implications

I've been a member since 2015 or something, used to post now and then, but got a nasty phone call from the Perth Mint threatening me with legal action about something posted here by another poster, not me. I had difficulty convincing them that I was OldFarmer and not this other person. I finally succeeded, but it was an unpleasant experience and I decided to stop participating if litigious corporate drones were monitoring the discussion here.

Anyway, back to the subject, I suppose if you had small denomination coins and a lot of time on your hands, you could sell them piecemeal to other investors a little at a time, and not declare the capital gains. I don't have the time or interest, and I don't want to take the risk.
 
OldFarmer said:
I've been a member since 2015 or something, used to post now and then, but got a nasty phone call from the Perth Mint threatening me with legal action about something posted here by another poster, not me. I had difficulty convincing them that I was OldFarmer and not this other person. I finally succeeded, but it was an unpleasant experience and I decided to stop participating if litigious corporate drones were monitoring the discussion here.

Anyway, back to the subject, I suppose if you had small denomination coins and a lot of time on your hands, you could sell them piecemeal to other investors a little at a time, and not declare the capital gains. I don't have the time or interest, and I don't want to take the risk.
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You have a point so perhaps we should just work this out ourselves in private.
 
Changes to CGT affects us negatively. We were able to control our tax when selling assets. Keeping profits within the income tax free threshold to 16%, as of the 1st July 2027 our tax will be 30%.
We can either liquidated and buy a few rental properties for income stream using income tax threshold keeping home buyers out reach or leave the country.
Unintended consequences, forces alternative investors back into the housing game.
Not sure how this helps the housing market or first home buyers. I’ll be a cash buyer looking to maximise my return with high rent.
Enjoy your moment of joy while it lasts Shiney
 
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betterinvestmentthanshare said:
or leave the country.
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I must admit that over the last few years I have heard quite a few people spouting their dissatisfaction with the Labor government, and the conversation generally ending with a threat to leave Australia.

The problem, as I see it, is that the rest of the world is to varying degrees in a similar situation.

So the question is, where would you go to?
 
betterinvestmentthanshare said:
Changes to CGT affects us negatively. We were able to control our tax when selling assets. Keeping profits within the income tax free threshold to 16%, as of the 1st July 2027 our tax will be 30%.
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Your tax rate won't be 30% from July 2027. The minimum cgt rate of 30% will only apply to the amount of gains made from July 2027 onwards. The old rules (50% discount, no minimum rate) will apply to the amount you gained up to July 2027.

 
trew said:
Your tax rate won't be 30% from July 2027. The minimum cgt rate of 30% will only apply to the amount of gains made from July 2027 onwards. The old rules (50% discount, no minimum rate) will apply to the amount you gained up to July 2027.

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trew said:
Your tax rate won't be 30% from July 2027. The minimum cgt rate of 30% will only apply to the amount of gains made from July 2027 onwards. The old rules (50% discount, no minimum rate) will apply to the amount you gained up to July 2027.

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Either you don’t understand or I don’t
I’ll give you an example

Mr and Mrs Betterinvestment are self funded retirees both under 60 years of age.

They live off selling liquid assets accumulated over their working life, they don’t have investment property or any other income

Under the previous tax rule they each sold liquid assets receiving a total taxable profit each of $18200 which is then added to their income and taxed under the income tax threshold.

Because they don’t earn any other income their profits remains in the tax free threshold of 0%

So my question to you is, under the new rules, profits from selling their assets are no longer considered income, will they now have to pay tax? And how much?
 
betterinvestmentthanshare said:
Changes to CGT affects us negatively. We were able to control our tax when selling assets. Keeping profits within the income tax free threshold to 16%, as of the 1st July 2027 our tax will be 30%.
We can either liquidated and buy a few rental properties for income stream using income tax threshold keeping home buyers out reach or leave the country.
Unintended consequences, forces alternative investors back into the housing game.
Not sure how this helps the housing market or first home buyers. I’ll be a cash buyer looking to maximise my return with high rent.
Enjoy your moment of joy while it lasts Shiney
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The function of taxation is to control the amount of money circulating in the economy. Currently in regards to housing (as with all assets) there is too much money held by too few with all the power to leverage their collateral (through borrowing) into scooping up more assets which drives up prices. These same property investors for some reason are rewarded with a generous discount on the amount of tax that they pay when they dispose of an asset for simply buying something early and holding on to it. In other words capital accumulation is rewarded at the expense of hard work and productivity improvements.

Now no doubt you and your partner worked hard to get into the position you are currently, but your capital is not working hard. It just sits around and gets more valuable year by year and you're getting rewarded by simply being ahead of those in the queue behind you, who are getting pushed further and further back in the line by those ahead. And you still expect a discount on taxes?

If indeed your scenario is true that alternative asset investors will dump their cash into the housing market, then unlike what all the pearl clutchers screaming foul in the media are shouting, there will be no shortage of rental properties available on the market and any attempt by unscrupulous landlords to charge excessive rents will likely fail.

I'm enjoying this moment because the wealthy have been screwing the rest of us over with the support of government for decades and there's a sense of schadenfreude in watching them flood the media with tears. At a personal level though my wife and I will also be impacted as we also own assets and were intending to sell in a few years to fund our retirement and clear any debts we may still have. We obviously may have to have reassess that strategy.

This is a good move for Australia.

I see NZ has offered an olive branch to all the disgruntled investors. They don't have much to offer but for anyone that's uber wealthy that's fine, after all when they're cruising the Rhine every year or dining in a Dubai restaurant 75 floors above the peasants it matters shit that the employment market, groceries and wages etc are crud because they're never there.
 
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I googled the following question: "what is the distribution of negatively geared property investors in Australia".

I expected to see a high proportion of the 1.1m negatively geared properties in capital cities, which was confirmed. However, I was surprised to see these nuggets:
- 67% of NG beneficiaries earned under $100k.
- Roughly half of investment properties are negatively geared,
- WA had a motza,
- 70% of rentals appeared to be running at a loss a couple of years ago.

NG means that a large proportion of capital city rentals are currently operating at discount rents. I conclude that the budget will mean that rental prices will go up unless constrained by affordability, and that capital city renters will cop it.

The other sting in the budgetary tail seems to be in the neck of aspirational 16 to 60 year-olds. The Government will become uncontributing silent partners in any new start-up business, franchise or side job from July 2027, bearing no risk or cost. If the business prospers, they will take nearly half of the profits. Either people will lie flat, or flat-out lie.
 
Shiney, the main goal for everyone is to retire from work and the headaches and sacrifice to achieving that goal.
The young generation has always struggled to get into property including myself, I thought I would never own a home let alone retire early. It wasn’t till I understood what I had to do to achieve the goal.
My 3 adult kids are all in their early 30’s and well on the way to retire early, the only help they got from me is financial advice and the rest is up to them.
Who’s business is it how I choose to use my capital during retirement?
Your view in this sounds very communistic.
No one gave a shit that we were living on the bones of our arse for 30 years and investing every cent for the goal of comfortable self funded early retirement.
If fact we were looked down upon and those that did are still working, still in huge debt, still trying to keep up with the Jones, still crying poor and spending their capital on crap.
I’ve been rewarded because I sacrificed for it, no other reason.
My assets selling is my income. I pay full price and tax in every penny I spend.
Everyone is behind the queue when they start, including myself, what they choose to do is up to them but it’s seems they all want it given to them instead of creating it themselves.
I’m not a liability to the state, what is becoming more apparent is the push to make everyone a liability including yourself. Yes we do live completely different, I depend on myself
 
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betterinvestmentthanshare said:
Shiney, what is your definition of wealthy?
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For convenience i'll run with this:

the top 10% of income earners accrue around 82% of the tax savings from theCGT discount in 2025–26. Within this group, benefits are even more concentrated, with the top 1% ofincome earners accounting for almost 60% of the total tax savings.
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The wealthy get a major benefit which comes at the expense of around 90% of the population because those capable of leveraging their wealth using equity simply fuel asset bubbles across all markets.

My position is not communist, it's based on a sound free-market principle. Something that the introduction of the CGT discount was meant to assist, but failed.
 
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betterinvestmentthanshare said:
Who’s business is it how I choose to use my capital during retirement?
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No one's, just don't expect the government to provide tax relief if you're succesful.

betterinvestmentthanshare said:
I’ve been rewarded because I sacrificed for it, no other reason.
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The CGT discount is an added reward. Time to do some sacrificing again.

betterinvestmentthanshare said:
Everyone is behind the queue when they start, including myself
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The queue is getting longer, it's BS to suggest otherwise. Look at RE prices v wages, look at the accumulation of wealth by the top 10%. It was easier to buy a house when I was in my twenties that it is for kids in their twenties today.

betterinvestmentthanshare said:
I’m not a liability to the state, what is becoming more apparent is the push to make everyone a liability including yourself. Yes we do live completely different, I depend on myself
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That's sheer nonsense. The government is not trying to make us liabilities of the State. They don't need to because they have a monopoly on the issuance of currency, that's all the power they need to force us to comply with their tax system.

And you've got no idea of my financial position, we also depend on ourselves champion. The difference between you and me is that I accept that the government shouldn't be incentivising investors tying up capital in non-productive resources which ultimately just drives up the cost of living for the majority of Australians - even if this policy decision may have a negative impact upon my financial future.

You may be vastly better off than me, but we're both independent, but the main difference is that our values don't resonate.
 
hyphenated said:
NG means that a large proportion of capital city rentals are currently operating at discount rents.
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No, they're rented at market rates. All it means is that the rent doesn't cover the repayments because those investors are either deliberately chasing losses to reduce personal income tax or they're leveraged too high.

They'll be the ones that leave the market to be replaced either by homeowners or other investors who can ensure that their investment is not operating at a loss in the absence of a lifeline from government.

NG was introduced in order to encourage investors to bring supply to the market - it's clearly failed as a policy.
 
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