For most young families in Australia, the dream of purchasing and owning their own home is almost completely out of reach.
Working and middle class families are increasingly being priced out of the housing market. Ownership rates for young people aged 25-34 have spiralled downwards in recent years from 60% to 48%. Young people are being forced to take on levels of debt unimaginable just a few decades ago.
With first home buyers making up just 1 out of 7 of all home purchases, we have to do better. It’s well and truly time someone did something about making housing more affordable in Australia. That’s why Labor has announced a policy that will help level the playing field for first home buyers competing with investors.
Labor will reform the capital tax discount effective from 1 July 2017, a policy which will help put the Australian dream of home ownership back within the reach of middle and working class families.
Australia aspires to be a fair society and we expect our tax system to align with this aspiration.
Ultimately, a dollar of tax avoided by high income Australians is an extra dollar of tax paid by all other Australians.
Labor is committed to ensuring that the tax system is fair for all Australians.
Labor will halve the capital gains discount for all assets purchased after 1 July 2017. This will reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent.
All investments made before this date will not be affected by this change and will be fully grandfathered.
This policy change will also not affect investments made by superannuation funds. The CGT discount will not change for small business assets. This will ensure that no small businesses are worse off under these changes.
Labor will consult with industry, relevant stakeholders and State governments on further design and implementation details ahead of the start date for both these proposals.
Further information is available here.