The recent announcement that capital gains tax will remain at the same level for the foreseeable future is good news for buyers in Canberra.
If you're thinking about buying a new home , but don't know where to look, you should consider the coolest little capital in Australia – Canberra. Aside from having plenty to offer in terms of community spirit, great parks and schools, now is a great time to buy property. The market conditions are favourable, and it's far more affordable than other major centres around the country!
CGT is a measure to help ease the pressure on the current housing market by allowing turnover of existing homes.
Prime Minister Malcolm Turnbull announced on February 16 that there would be no changes made to the capital gains tax (CGT) for housing. This is a measure to help ease the pressure on the current housing market by allowing turnover of existing homes, while also pushing for new homes to be built without penalties and excess taxes.
Canberra: an affordable market
The median dwelling value in Canberra is $675,320 according to the CoreLogic RP Data monthly indices to the end of January. That value has increased by just 6.72 per cent over the past 12 months, which represents a much slower growth market than other cities. However, for affordability, that's exactly what buyers want.
Sydney has grown by 15.97 per cent in the last year, for example, and Melbourne by 11.82 per cent. In fact, the five biggest capital cities in the country collectively increased in value by 10.71 per cent! Canberra hasn't shown the same extreme growth, but remains steady. This means good chance of capital gains for investors, and good returns over the length of the ownership for owner-occupiers.
Why is CGT not increasing?
In order to discourage investors from dominating the market, the government was considering implementing a rise to CGT this year.
Capital gains tax remains constant, meaning buyers will not be penalised with excess costs.
"In the lead up to last year's election, there were a range of proposals from reducing CGT on investment properties to applying the tax on the family home," stated Housing Industry Association Deputy Managing Director Graham Wolfe in a February 17 media release.
"Yesterday's categorical statement by the government provides continued certainty to the industry and to investors. The housing industry has opposed changes to the way capital gains are currently treated on investment properties. It would mean investors pay even more tax.
"Housing cannot be asked to pay even more taxes. It would simply have the opposite effect."
In order to take advantage of the stable CGT from the government, and to get into the attractive property market in Canberra, get in touch with the local experts at Peter Blackshaw Real Estate .