Government Will Retain Gearing Benefits

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison have confirmed that tax offsets through negative gearing and the capital gains tax discount won’t be changed in the May 3 budget.

“A tax on mum and dad investors is not a good plan for families,” Morrison says. “It’s not a plan for jobs. And that’s why we will have no bar of it.”

The confirmation did not come as a surprise, given the Federal Government’s criticism of Labor’s plans to limit negative gearing to new properties. Labor has announced it will halve the capital gains tax discount from 50% to 25%, should it win the likely Federal Election.

The Prime Minister says the Opposition’s tax plan would deliver a “reckless trifecta” of lower home values, higher rents and less investment.

Morrison, who will hand down a tax reform package with his first Budget, says Labor’s proposal is nothing more than a housing tax.

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