CGT DISCOUNT

Hi David,

As of now, there is no confirmed plan to distinguish between shares and property, but property is clearly the political focus due to affordability issues.

Predicting what politicians will do is hard at best, without appearing too cynical, looking through the eyes of “voter popularity” is never a bad start.

• The government wants housing affordability to improve putting property in the crosshairs of CGT changes.
• Conversely the government wouldn’t want to hurt the stock market with most Australians holding shares either directly or indirectly through their Super.

To us logic would say it should only apply to property, with the specific aim of improving affordability, with far fewer people impacted, estimates are around 20% of households, BUT we are talking politicians and government here.

Also, historically, governments tend to avoid asset-class discrimination because it complicates the tax system and creates lobbying pressure, which is why the current discount is uniform. So your intuition is logical: If equities are included, it strongly suggests the objective extends beyond housing and into fiscal repair and structural tax reform.