The proposed changes to capital gains tax and negative gearing would boost
demand for new builds and kick start a fresh development boom as residential
projects become more feasible, property pros tell Green Street News.
The federal government scrapped negative gearing benefits on existing properties, although new builds, build-to-rent developments, superannuation funds and properties acquired before Tuesday’s budget are exempted. The government also proposed slashing the 50% capital gains tax discount and replacing it with inflation-indexation and a 30% minimum tax, effective from July next year.
Competition for development sites poised to rise Tas Costi, co-founder of commercial buyer’s agency Costi Cohen, said housing incentives and the push toward new supply could increase demand for welllocated development sites. “If investor demand shifts toward new housing and newly completed products, developers will need more sites,” he said. “
We expect increased competition for strategic development opportunities, particularly in supply-constrained metro markets.