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Originally Posted by b0son
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Investors paid no Capital Gain Tax prior to 1987...so on that logic it should have been harder for first home buyers back then than it is now! Prices should have been through the roof!
At least now, investors pay tax on 50% of the total gain in value, regardless of how long they've held it. Prior to 1999 there WAS a 'discount' on the CGT you paid, but it was linked to the inflation rate (in fact it was a sizeable discount if you'd owned the property for 10 years as total inflation over that time could be used to reduce the 'profit' they calculated the tax on). By removing the 'inflation over the total period' discount and replacing it with a 50% discount regardless of how long you owned the property, it costs investors more the longer they hold it.....and earns the Government $billions. $Billions more than when there was no Capital Gains Tax prior to 1987 (ie Zero).
Lets get it straight, property investment can be risky, but does have it's rewards for those taking the risk, but it also earns the Government plenty of money through CGT.
Personally, I'm not a big fan of negative gearing as I don't think you should be allowed to claim expenses that exceed the income on the property....that means other tax-payers are subsidising your investment. The investment should be able to stand on it's own two feet. But we need private investment, otherwise we'd have a massive shortfall in rental accommodation and society would struggle to cope with that.