BREAKING NEWS 🗞️ Restoring the old Capital Gains Tax system

Added: 2026-05-05

[00:00:00]big change being modeled right now as reported in media today and intel I'm getting the charmer's government is having a look at potentially going back to the old capital gain system the indexation method of 1999 they haven't made a final call but it's on the table and they're modeling it right now so let's compare the two because this matters if you own investment property or you're thinking about investing in property so let's say you bought a property for a mill I've done it on a napkin this and you sell it 10 to 12 years later for say 1.5 million that's a 500 grand gain under today's system you get a 50% discount. So your tax not on 500 on 250 and on and on that on the top tax rate you'd be paying about 120 grand in tax. So that's what your tax would be 120. Now let's look at the old system indexation. Instead of a discount, you adjust the purchase price for inflation.

[00:01:00]So over 12 years, if you're using a, you know, roughly the inflation rate we've had for a decade, that's 1 million becomes 1.3 to 1.35 million thereabouts.

[00:01:10]Now your real gain no longer is 500.

[00:01:13]It's closer to 150,000. And your tax bill then becomes around 70k. Same property, same sale price, but a very different tax outcome. So, by the looks of it, indexation is likely a better outcome for long-term holders, right?

[00:01:33]The current system tends to favor short-term sellers. And if the government goes down this path, I think what they're thinking is it's probably because they're trying to discourage the short-term flipping that might happen, the quick in-n-out plays, which can push prices up and make it harder for the first home buyers to compete. But let's not forget Anzac Day. We pause to remember those who served and sacrificed for this great country, country we love, Australia.