Episode Details
Back to Episodes
Ep 400: CGT discount changes: what property investors should do now
Description
In this episode, Stuart breaks down the growing political debate around capital gains tax (CGT) and what potential changes could mean for Australian property investors.
Following a Senate committee review, policymakers are now discussing the possibility of reducing the CGT discount and even limiting negative gearing to a small number of properties. Stuart examines the claims behind these proposals, including whether investor tax incentives are really responsible for rising house prices, and why housing supply remains the dominant driver of affordability.
He then walks through modelling that compares three potential CGT systems: the current 50% discount, a reduced 33% discount, and the original inflation indexation model used when CGT was first introduced. Using a 30-year property investment example, Stuart shows how reducing the discount would affect after-tax returns, internal rate of return (IRR), and the overall profit investors might expect from a leveraged property strategy.
The episode also explores how these tax changes could alter the investment landscape. If property tax advantages are reduced, borrowing to invest in shares, particularly tax-efficient global equity portfolios, may become comparatively more attractive.
Finally, Stuart discusses lessons from the UK, where investor-focused tax reforms reduced landlord participation and tightened rental supply, contributing to rising rents.
My new book out in 2026: To join the pre-order waitlist and get a bonus. More info go to: http://www.investopoly.com.au/book
Do you have a question for the podcast? Email us at questions@investopoly.com.au.
If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/
If this episode resonated with you, please leave a rating on your favourite podcast platform.
Subscribe to my weekly blog: http://www.investopoly.com.au/email
Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/
IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.