Realestate.com.au
PROPERTY investors sitting on some of Brisbane’s most valuable homes could be slugged with tax bills approaching $1.4 million under proposed changes to Australia’s Capital Gains Tax system.
New modelling has revealed that the Queensland capital would be among the hardest-hit markets in the nation.
Exclusive analysis by PropTrack shows investors who have held properties in Brisbane’s blue-chip suburbs for decades stand to lose hundreds of thousands of dollars more in tax if the Federal Government’s mooted Capital Gains Tax reforms become law.
The findings underline just how dramatically Brisbane’s housing market has outperformed the rest of the country over the past 35 years, with the city recording the strongest real house price growth of any Australian capital once inflation is taken into account.
According to the modelling, Brisbane house prices have risen by more than 1000 per cent since 1990, significantly outperforming Sydney, where values increased about 730 per cent, and Melbourne, where prices rose about 565 per cent.
Had Brisbane house prices simply tracked inflation over the same period, the city’s median house price would still sit below $250,000. Instead, it has surged beyond the $1 million mark.
For the average investor, the difference is substantial. Someone who purchased a median-priced Brisbane house for $95,000 in 1990 would pay approximately $381,640 in tax under the proposed model compared with $226,775 under the current system – a difference of almost $155,000.
PropTrack senior economist Angus Moore said around 27 per cent of properties that generated capital gains over the past decade would have been better off under an inflation-indexed model.
Importantly, newly built homes would receive special treatment.
Investors in new dwellings would be able to choose between the existing 50 per cent discount and the inflation indexed method when they eventually sell, potentially a significant tax advantage.
Tax experts said the proposed reforms could reshape investor behaviour and redirect money toward new housing developments.
The proposal remains part of a broader national debate around housing affordability and tax reform, and legislation has not yet been introduced to Parliament.
However, the city’s investors stand to have more at stake than almost anyone else if the changes proceed.
For many long-term property owners, the question is no longer whether the debate matters.
It is how much of their future profit could ultimately end up in the hands of the Tax Office.
