Short Window of Opportunity is Opens for Investors

16 May 2019| Posted by: Geoff Baldwin

With Labor almost certain to take the reins of government in Australia on Saturday a window of opportunity for investors to buy established and negative gear is open but only till the end of 2019 Geoff Baldwin, RE/MAX real estate MD said today.

Bill Shorten has committed to ending negative gearing on established property purchased from 1 January 2020 which means that a property would need to be purchased and settled in 2019.

It is expected that a surge of investors will hit the market following Saturday’s election should Labor win, with people and also family superannuation funds wanting to secure their last chance to maximise tax benefits and reduce their costs of holding rentals property, Baldwin said.

Right now, particularly in Western Australia prices are at the bottom, rents are rising due to tenant demand, the mining sector is bouncing back strongly as is the WA economy and there will be no better time to enter the market as an investor.

The other added incentive is that interest rates are at a record low and predicted to go lower which makes investing all that more affordable.

Investment purchases of established property rather than newly built property equate to approximately 30 percent of the property investor market so there is little doubt that cutting out this sector will reduce available rental stock and push up rents across Australia.

On the surface people see negative gearing as a tax claim only for money spent however there are other “non cash” claims such as depreciation on the construction and chattels that can help increase tax rebates in a property investment.

It is very advisable for first time property investors who are considering taking advantage of this opportunity to ensure they are well informed and that they deal with an agent who has a very good knowledge of property investment, Geoff Baldwin said.