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Australian Financial Review
Look up, not out for negative gearing after the budget
Honoured to comment for The Australian Financial Review on the Federal Budget changes that will likely recognise new rooftop homes as new builds. Article by Jessica P. Look up, not out for negative gearing after the budget The budget limited negative gearing to new build properties, but that doesn’t mean you need to buy in a greenfield site on the city fringe. Looking for negative gearing? Look up, not out. The space above flat, idle roofs in the heart of capital cities could provide an answer for residential property investors hoping to harness generous negative gearing and capital gains tax discount settings under the recent budget changes. It is understood that airspace developments – which use rooftop space above existing apartment blocks – will qualify as new builds. May’s budget grandfathered access to negative gearing and the ability to choose the 50 per cent capital gains tax discount over the new inflation-adjusted discount with a minimum tax rate of 30 per cent to existing residential property investors, but from now on, investors who buy a new build will still be allowed to access both. While the government has yet to define what constitutes a new build – the definition was not included in the budget bill legislating the tax changes that passed parliament in late June, with it to be enshrined in a separate legislative instrument – greenfield house and land packages or new apartment developments have been considered the most likely candidates. But Warren Livesey, chief executive of the Association of Rooftop & Airspace Development, said a “pub test” had taken shape to fill the void, with a development likely to be considered a new build if it adds to housing supply and is on a separate title. “Because rooftop homes are separately titled, they qualify as new builds,” he said. By contrast, the government has already ruled that granny flats, which may add to housing supply but are typically not on a separate title, don’t qualify...
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