Budget brief: Impact on property
We review the 2016/17 Federal Budget and what it could mean for property.
RentCover is one of the biggest providers of landlord insurance protection in Australia so we are always keen to keep a finger on the pulse of property investment.
Speculation bubbled about how the property industry would be impacted by the Federal Budget but the $6 trillion sector was not directly targeted when the Government handed down its latest plan on 3 May.
There was a sigh of relief from investors as both negative gearing and the capital gains tax (CGT) concessions were left in place. Federal Treasurer Scott Morrison said the Government would not “remove or limit negative gearing” but Labor is still promising to make cuts to both if it wins the election on 2 July.
Some commentators say we can expect a boom in the number of people buying negatively-geared investment property if changes to superannuation continue. A raft of new conditions has been introduced for those with high incomes and substantial superannuation nest eggs and the opportunities to minimise tax through super seem to be diminishing.
And of course, the RBA dropping the official cash rate to an historic low of 1.75 per cent on the same day that the Budget came down bodes well for property and anyone planning to borrow to buy.