The Australian Labor Party will introduce its negative gearing and capital gains tax reforms by 1 January next year should the party win the upcoming election.
Speaking on Friday, shadow treasurer Chris Bowen said the start date would allow time for scrutiny of the policy and industry consultation.
Building groups like the Property Council of Australia have long opposed Labor’s policies, which would see negative gearing benefits limited to investors purchasing new properties, and slash the capital gains tax discount.
Don’t know what the reforms mean? We explain it here.
The policy changes are designed to encourage investment in new dwellings and make housing more affordable for first home buyers.
However the Coalition argues the reforms will unfairly hurt investors and take the wind out of an already-slowing property market.
He acknowledged that the roll-out date is sooner than the expected 1 July 2020 date, but said that there will still be time for “proper legislative processes, draft legislation, proper consultation”, in a statement gathered by AAP.
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And, he added, the changes to negative gearing and capital gains tax benefits will not impact current investors, whose tax situations will be grandfathered.
“If you already use negative gearing, nothing changes. It’s not retrospective. And you can still use it for new houses,” he said.
“Federal Labor’s plan is good for the budget, good for housing construction jobs and fair for first home buyers.”
Economist Stephen Koukoulas echoed the sentiment, welcoming the start date on Twitter.
“[It’s] an important reform to make the tax system fairer, will add to dwelling supply, improve the bottom line of the budget. Hard to see why there are any objections to it,” he said.
The Coalition disagrees, with Assistant Minister for Treasury Zed Seselja arguing that this is the worst possible time for the Labor policy.
“Bill Shorten must stop ignoring the warning signs, admit he got this one wrong and ditch his big new housing taxes,” Senator Seselja said.
– With AAP.
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