Making news this week, a new report called for a review of tax exemptions on the family home, an aggregator weighed in on what brokers should focus on in 2016 and non-major lenders announced major rate cuts.
The capital gains tax (CGT) has been cast into the spotlight
after a new proposal to tax profits on the sale of houses over $2 million was released this week by the Australia Institute.
According to financial modelling in the report, removing the capital gains tax exemption for these homes would boost the budget by $12 billion over four years. The report also claims the capital gains tax exemption on the main residence costs the federal budget more than defence, education or Medicare. It is also a big factor in housing affordability in Australia.
However, according to the Property Council of Australia
, removing the CGT exemption on the family home would add a significant cost to moving, reduce renovations activity and reduce new dwelling construction.
The chief executive of leading aggregator Vow Financial also told Australian Broker
this week that debt management should be a major focus for brokers this new year
Vow CEO Tim Brown said debt management will be particularly important for consumers this year in a slowing property and financial market.
“I think [debt management] will be important for a number of reasons this year. The property market is starting to slow, the equities market is in a nightmare, and I think for our clients it is about building cash. I think cash will become king as the market starts to slow and I think people who are in better position with a strong capital flow and strong equities positions – in other words, paying some debt down – will be in a stronger position to select an opportunity moving forward.”
Finally, a number of non-major lenders announced major variable and fixed interest rate cuts on both owner-occupied and investment lending.
Suncorp led the charge
, discounting its interest rates by up to 1.55% across selected standard variable and fixed rate home loans.
This was shortly followed by ING Direct and AMP Bank
, which announced a raft of different rate cuts across selected variable and fixed rate home loans.