Will Labor go ‘Back to the Future’ on property CGT?
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According to 9News, the upcoming federal government is likely to see the Albanese government revert the capital gains tax (CGT) on property investment to the system in place before 1999, which taxed real capital gains (i.e., after adjusting for CPI inflation) at one’s marginal tax rate.
Such a reform would represent a marked change from the current system, which taxes nominal capital gains at 50% of one’s marginal tax rate, provided that they hold the property for more than 12 months.
Moving back to the pre-1999 method of CGT calculation offers several benefits for tax efficiency, fairness, and budget sustainability.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.