Daniel Gannon: Govt’s tax changes to hit retirement living investment
- Tax changes: Peak body warns retirement living investment will slow
- Less supply: Fewer new villages and homes
- Housing impact: Downsizing pathway squeezed
- Sector warning: Australia needs more seniors housing, not less
The Government’s changes to Capital Gains Tax (CGT) and negative gearing will hurt the retirement living sector, says the peak body’s Executive Director.
“CGT and negative gearing changes will pull the handbrake on the very investment Australia needs,” Daniel Gannon said.
He had warned at the National Retirement Living Summit, the retirement sector sector doesn’t have a demand problem – it has a supply problem.
“When retirement living supply stalls, everyone feels it,” he said.
With the support of the Greens, the Government last week passed its tax legislation six weeks after the Federal Budget, with modest concessions granted after a backlash from business groups, start-ups and investors.
The laws eliminate the 50% discount on capital gains for most investments and introduce a minimum 30% tax on real – inflation adjusted – gains.
Negative gearing was also axed for residential property acquired after the May 12 Budget, except new-build homes that add to supply such as houses on greenfield sites, duplexes and apartments.
Capital gains accrued until 30 June next year will be eligible for the 50% discount, but gains earned thereafter will be taxed under the new CGT inflation indexation system after assets are sold.
“Older Australians have fewer options to rightsize. Family homes stay locked up. Younger families have fewer homes to move into. Hospitals and aged care carry more pressure,” Daniel said.
“We won’t solve housing by turning generations against each other.”
