Tax will change in 2019: here’s why you should be prepared
Tax could get tricky this year, with political parties making it a battleground in the federal election, but there are steps you can take now to put yourself in a better position.
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A barrage of tax changes set to be announced this year should not deter Australians from trying to move their finances forward.
Uncertainty around the federal election and Labor’s plan to lift taxes for investors and retirees have worried many people, but money and tax specialists say retreating into a shell while it all plays out could be costly.
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Labor wants to end negative gearing for new property purchases, abolish franking credit refunds for many retirees and super funds, and halve the capital gains tax discount from 50 to 25 per cent for future investments.
The Coalition is making tax a battleground for the election by foreshadowing its own tax cuts.
But a Labor Party armed with billions of extra dollars from its new tax haul is also likely to throw up some big sweeteners.
Dixon Advisory managing director Nerida Cole said it could seem too confusing but people should maximise their tax incentives and super contributions every year.
“Don’t miss out on what you can do now,” she said.
“It’s worth people thinking not just about what they are planning to do this year, but what they think they’re going to be doing in the next couple of years.
“It could be worth bringing forward a strategy to get it into this year.”
This could include putting extra money into super, or buying investments such as property and shares before Labor’s plan to weaken capital gains tax discounts kicks in.
NDA Law managing director Andrea Michaels said the planned changes would only apply to future investments, and it was worth understanding how they might affect your personal situation.
“We don’t know what the final version of any of these policies will look like when they get through parliament,” she said.
“Know which issues are applying to you and get your head around them now.”
This could include bringing forward investment property purchases to avoid the potential capital gains and negative gearing overhaul.
“Look at what your portfolio comprises,” Ms Michaels said.
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