The plan to remove capital gains tax concessions
A new plan from the Greens Party would see capital gains tax concessions for property sales phased out.
The Greens Party has called for a complete removal of capital gains tax (CGT) concessions from property in order to ease housing affordability.
The Greens yesterday announced their policy, which would see CGT concessions for property sales phased out by 2020, The Sydney Morning Herald has reported. Greens co-deputy leader Senator Scott Ludlam has said the proposal could generate $119.5bn in savings over the next decade, including more than $7bn by 2019.
Currently, homeowners can avoid paying CGT entirely if selling a dwelling considered their main place of residence. Vendors selling an investment property can take advantage of a 50% discount off their CGT liability if they have held the asset for more than 12 months.
The Greens’ proposal, however, would see this 50% discount phased out, reducing concessions by 10% every year for five years. The plan would run parallel to the party’s plan to phase out negative gearing.
What are the Coalition and Labor plans for Negative Gearing?
Ludlam said the plan did not just apply to property, but also to all other forms of capital gains, such as art and investments.
“This is because tax on other forms of income, such as weekly earnings and interest on savings, receives no such discount, so we can't see any justification for any part of capital gains to be tax-free," Ludlam said.
For a comprehensive look at current CGT structures, check out our guide to avoiding capital gains tax when selling your property.Learn more about CGT
my husband and I purchased a house in January 1987 for $151,608.00 but did not move into it until 1997, as we were doing major renovations. We have lived in the house for over 20 years now and the value has gone up to $2.4 million. Will we have to pay capital gains tax on the sale of the property? At no time was it ever rented out.
Hi Bronwyn,
Thanks for getting in touch with Finder. I hope all is well with you. :)
There’s a chance that you will get exempted for paying the Capital Gains Tax (CGT) based on the information you mentioned.
According to our guide on how to avoid CGT when selling property, you can avoid paying CGT if you sell a dwelling that’s considered your main place of residence. You can only ever have one main residence at any given time unless you’re selling your old main residence and buying another. In this case you’re entitled to an overlap period of six months as long as the new property will be your new main residence, you lived in the old property for at least three continuous months in the 12 months before you sold it and it wasn’t used to produce rent in this same 12 month period.
If you need more help, you can directly ask your local tax office or speak with a property tax specialist.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua