The International Monetary Fund (IMF) released its Article IV report on Australia, which included wide-ranging discussion on Australia’s distorted property market, as well as gave tacit support to Labor’s proposed reforms to negative gearing and the capital gains tax (CGT) discount, as well as to replacing stamp duties with land taxes:
Broader tax reforms that also address housing and land use would reinforce the impact of supply-side measures. Stamp duties should be replaced by broader land taxes, which would strengthen incentives for efficient land use. Within the context of a broader tax reform, gradual lowering of capital gains discounts and limits on negative gearing for investors would reduce structural incentives for leveraged investment by households, including in residential real estate. A more limited capital gains tax exemption for owner-occupiers should also be considered…
