Stay out of your shell

NT News - Real Estate - - Real Estate | Market Place - AN­THONY KEANE

A BAR­RAGE of tax changes set to be an­nounced this year should not de­ter Aus­tralians from try­ing to move their fi­nances for­ward.

Uncer­tainty around the fed­eral elec­tion and La­bor’s plan to lift taxes for in­vestors and re­tirees have wor­ried many peo­ple, but money and tax spe­cial­ists say re­treat­ing into a shell while it all plays out could be costly.

La­bor wants to end neg­a­tive gear­ing for new prop­erty pur­chases, abol­ish frank­ing credit re­funds for many re­tirees and super funds, and halve the cap­i­tal gains tax dis­count from 50 to 25 per cent for fu­ture in­vest­ments.

The Coali­tion is mak­ing tax a bat­tle­ground for the elec­tion by fore­shad­ow­ing its own tax cuts. But a La­bor Party armed with bil­lions of ex­tra dol­lars from its new tax haul is also likely to throw up some big sweet­en­ers.

Dixon Ad­vi­sory man­ag­ing di­rec­tor Nerida Cole said change could seem con­fus­ing but peo­ple should max­imise their tax in­cen­tives and super con­tri­bu­tions ev­ery year.

“Don’t miss out on what you can do now,” she said.

“It’s worth peo­ple think­ing not just about what they are plan­ning to do this year, but what they think they’re go­ing to be do­ing in the next cou­ple of years.

“It could be worth bringing for­ward a strat­egy to get it into this year.”

This could in­clude putting ex­tra money into super, or buy­ing in­vest­ments such as prop­erty and shares be­fore La­bor’s plan to weaken cap­i­tal gains tax dis­counts kicks in.

NDA Law man­ag­ing di­rec­tor An­drea Michaels said the planned changes would only ap­ply to fu­ture in­vest­ments, and it was worth un­der­stand­ing how they might af­fect your per­sonal sit­u­a­tion.

“We don’t know what the fi­nal ver­sion of any of these poli­cies will look like when they get through par­lia­ment,” she said. “Know which is­sues are ap­ply­ing to you and get your head around them now.”

This could in­clude bringing for­ward in­vest­ment prop­erty pur­chases to avoid the po­ten­tial cap­i­tal gains and neg­a­tive gear­ing over­haul.

“Look at what your port­fo­lio com­prises,” Ms Michaels said.

Tax changes are com­ing – but don’t be afraid to move your fi­nances for­ward

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