Summary of proposal
Party
Independent
Policy Topic
Taxes
Portfolio
Treasury

The proposal has 5 options, which make changes to the capital gains tax (CGT) discount and negative gearing arrangements (which allow losses relating to an investment property to be deducted from non-investment income) for all individuals, trusts, partnerships and superannuation funds, as per the below table. All options would take effect from 1 July 2024.

  Component 1 – Capital gains tax  Component 2 – Negative gearing arrangements
Option 1 Remove the CGT discount for all residential property assets purchased after 1 July 2024, with property assets purchased prior to this date to be grandfathered under existing CGT discount arrangements.  Remove negative gearing arrangements for 
residential property purchased after 1 July 2024, with homes purchased prior to this date to be grandfathered under existing negative gearing arrangements.
Option 2 Remove the CGT discount for all residential property assets purchased after 1 July 2024, with property assets purchased prior to this date to be grandfathered under existing CGT discount arrangements.  Remove negative gearing arrangements for an investor’s second or subsequent investment property interests. 
Option 3 As per Options 1 and 2, but provide a 25% CGT discount for new homes built after 1 July 2024, if these homes are held for longer than 3 years. As per Option 2, but also disallow rental deductions for vacant properties. 
Option 4 As per Options 1 and 2, but provide a 50% CGT discount for new homes built after 1 July 2024, if these homes are held for longer than 3 years. Remove all negative gearing arrangements.  
Option 5 No changes to CGT.  As per Option 4, but disallow deductions for vacant properties, and allow negative gearing for new properties purchased or built after 1 July 2024. 

For Option 3 and Option 5, vacant properties would not include unoccupied properties that are undergoing construction, or are on the market but yet be rented. 

23 April 2024