Investors in the share market are undercompensated for the impact of inflation under current capital gains tax (CGT) settings, according to the budget.
As expected, the federal government will scrap the flat 50 per cent CGT discount for investments for more than 12 months, a measure largely sold as addressing intergenerational housing inequality.
But the budget also highlighted the potential to shift investment away from existing properties and into stocks and new properties.
“The reforms to negative gearing and capital gains tax are expected to improve the efficiency of investment decisions, as they are more likely to be made for economic reasons rather than tax outcomes,” the budget read.
