Rather than reducing or abolishing the CGT relief for investment properties held for over 12 months, why doesn't the Government allow first home buyers to acquire an investment property with no CGT payable if they buy a new home or investment unit? The issue at the moment is the mortgage repayments for new home buyers, even if they have saved a deposit, are very high proportionate to their salaries - by providing concessions to first home buyers and extending it to investment properties it allows them to use rental income to assist in repaying the mortgage. Tax concessions like reduced stamp duty and no CGT (for say the first 10 years of ownership) on new homes only would help increase supply of new homes, providing more homes ultimately for rent and also ownership, whilst extending property ownership in the hands of new home buyers.
I feel the Government is trying to stymie investment by reducing CGT relief which will ultimately lower tax receipts as investors will stop investing in property, adversely impact construction industry and increase unemployment, without necessarily reducing property prices for new buyers.
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