Investors Threaten to Leave
One in three investors is threatening to sell up if capital gains tax is increased, with a peak investment body warning it will make the rental crisis even worse.
Research from the Property Investment Professionals of Australia (PIPA) found 35% of investors would stop investing in property if the capital gains tax amount is increased by changing the formula for calculating CGT.
Just the fear of changes to capital gains tax has been enough for some investors to already pull out, with 19% selling in the past year over concerns about federal tax reform.
About half of the current investors surveyed say possible changes are making them consider selling within the next year or two.
PIPA chair Cate Bakos says it is renters who will feel the consequences first if investors pull out of the market.
She says the exit will shrink the rental pool and intensify competition for housing at a time when vacancy rates remain tight.
“CGT is an investor issue, but the rental market impact is broader,” she says.
“If investors keep exiting, renters end up competing harder for fewer homes, and that pushes rents up.”
