What CGT changes would mean for Melbourne landlords, renters
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Proposed changes to Australia's capital gains tax regime could impact over 120 Melbourne suburbs, potentially causing rent rises and affecting tenants. The changes may lead to investors holding onto properties longer, reducing rental supply.
The Australian government's potential changes to the capital gains tax (CGT) regime could significantly impact Melbourne's rental market. Over 120 suburbs are considered to be in the 'danger zone' due to their reliance on capital growth rather than rental returns. A report by FoundIt found that 37% of Melbourne suburbs have rental houses with yields between 3.5 and 4.5%, making them vulnerable to CGT changes. Investors in these areas may hold onto properties longer, reducing rental supply and potentially causing rent rises. The changes could exacerbate the existing housing crisis, with many investors already selling up due to recent rental reforms and land tax increases. The outcome is likely to be a flattening in longer-term home value growth rather than a sudden increase in investor sales.
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