Investors and small businesses wanting to avoid paying thousands of dollars to have their assets valued for the new capital gains tax regime face a complex nine-step valuation formula to do it themselves, but would probably end up paying a higher tax bill.
On Tuesday night, Treasurer Jim Chalmers released four additional pieces of draft legislation and four explanatory memorandums totalling more than 100 pages to clean up the government’s contentious reforms to capital gains tax and negative gearing that passed parliament in late June.
Under the new regime, people who hold existing investments beyond July 1 next year must apply two different tax rates when valuing those assets.
Gains made before the new financial year are eligible for the existing 50 per cent discount on capital gains tax, and gains made after that date will fall under the government’s new inflation indexation system that taxes high-growth investments more heavily.
For unlisted assets such as property, Chalmers has given investors the choice to hire a valuer or use Treasury’s do-it-yourself valuation method included in the legislation. Accountants have warned that the DIY method is complicated and would potentially overtax gains made from some assets.
Source: https://www.afr.com/policy/tax-and-super/treasury-s-diy-plan-for-cgt-flayed-could-cost-investors-more-20260805-p60llj