Capital Gains Tax

The REIA has proposed to Government that consideration be given to implementing a sliding scale for Capital Gains Tax (CGT) and linking CGT to superannuation.

The REIA proposal, provided to the 2006 Tax Benchmarking Study, calls for:

• A model of declining CGT over a 10-year period – the rate of CGT would be 75% in year 1 and would decline on a linear sliding scale to 30% in Year 10 and would remain at that level thereafter.
  
• Extension of the small business 15-year CGT exemption to allow individuals of 55 years or over and retiring, or who were permanently incapacitated, and who had owned an asset continuously for 15 years, to be exempt from CGT if proceeds were rolled into their superannuation scheme. Currently an individual who is ineligible for a small business concession is only eligible for the CGT 50% discount.
  
• An increase in the retirement exemption for capital gains from a lifetime limit of up to $500,000 to a maximum of $1,000,000.
  

For more information on the REIA Capital Gains Tax policy, click here.

April 2006