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The Impact Of Capital Gains Tax On Residential Property Investment Performance And Viability In Australia

Net losses in a tax year may be carried forward, but not offset against income.
Personal use assets and collectables are treated as separate categories and losses on those are quarantined so they can only be applied against gains in the same category, not other gains. This works to stop taxpayers subsidizing hobbies from their investment earnings. (Wikipedia).
This study will include the impact of CGT on Residencial Property Investment Performance and viability in Australia. Some organizations believe that because of this capital gains tax the increasing number of house affordability is alarming. Only a small percentage of family can now be able to afford houses. Instead they resort on renting it, still it is not that affordable to rent one. This high cost of housing is because of the capital gains tax in Australian. However to some investors it has a positive effect on their business.
Capital Gain Tax as defined by Australian Taxation Office as the tax that you pay on any capital gain you include on your annual income tax return. It is not a separate tax, merely a component of your income tax. Your are taxed on your net capital gain at your marginal tax rate. All residential properties are subjected to capital gains tax. To those family that owns one or more properties the capital gain tax is complicated for them. Even if they uses the name of their spouse the said property is still subjected to capital gain tax. The Construction, Forestry, Mining and Energy Union – Construction and General Division, the CFMEU believes that Australia is in the grip of a housing crisis. This crisis is not only characterized by declining affordability in first home ownership, but by increasing levels of housing stress among low to middle income participants in the private rental market, the degradation and running down of public housing stock across Australia, and finally, by growing levels of homelessness in the community. The Union believes that this trend comes at a time when a select few have grown more and more wealthy off the back of a speculative boom in house and land prices, that serves to make the already well off even more affluent, while locking many ordinary Australians out of home ownership, and affordable rental housing. The Union bases its view on several important studies over the recent period, including work done by the Affordable Housing National Research Consortium, of which the Union was a part. However there are still residential properties which are exempted in the tax. This may have a positive effect to those who owns only one property but to some who has 2 or more property the capital gains tax is a burden for them.
Impact of Capital Gains Tax to Residential Property in Australia
As per described above one main impact of capital gain tax is the increasing number of non-affordability of renting and owning a house. Confusion on the application of the capital gain tax is also another reason of this. There are cases where in the property is not subjected to capital gain tax because of some exemptions which are further discuss in this paper.
Factors Determining Application of