I should start by saying, I am trying to find out information in good faith and have done a bit of research that was largely unproductive thanks to all the spin and “expert commentary”.
My understanding is the new proposal would tax gains adjusted for inflation at 30%. I am also of the understanding that you could claim a 50% discount on this tax if you lived in a property it would apply within a timeframe. I am not sure how it was calculated for other asset classes.
So I guess my questions are, is the above correct? What were the old rules? What are the new rules? What’s this 47% equity thing doing the rounds that just sounds incorrect?
The old rules were if you held an investment for over 12 months, when you sold it you only had to pay tax on 50% of the gains. So if you bought $1k of shares and they went up in value after 12 months to $2k, you would only have to pay tax on $500.
Now, you will have to pay a minimum of 30% tax on the whole $1000 gain. That means you have to pay a minimum of $300 in tax on that $1000 gain, whereas before you might have had to pay 30% of $500, which is $150, so you’re basically 50% worse off now.
This affects everyone, not just the rich. It makes investing in anything in Australia much riskier and less enticing. Taking a lot of risk only for the government to potentially take half of your reward is disgusting. They don’t refund you 50% if your investment goes to $0.
Tl;dr - the issue is that the government is now going to steal even more of your hard earned money, so it will be even harder for anyone to get ahead.