The prospect of the federal election on 18 May and a possible change of government has prompted some investors to snap up some property bargains in Adelaide, according to Raine & Horne.
General manager at Raine & Horne James Trimble said that he is seeing movement already.
“Some investors aren’t waiting to see if there will be a change of government on election night and are buying up properties in Adelaide now to ensure they don’t miss out on the current negative gearing benefits for established properties and the 50 per cent capital gains discount,” he said.
“It’s not 100 per cent clear yet when the grandfathering period starts and ends for the property changes, which will prove calamitous for many markets around Australia.”
Mr Trimble said there is a difference between a policy promise during an election campaign and an act of parliament.
“The expectation is the current benefits will end on 31 December, so this will give investors six and half months to lock in an investment and earn the existing tax benefits. After this deadline, negative gearing for established properties will be gone and the discount will drop to 25 per cent.
“The smart money is buying investment properties now as they know they will hold the current benefits regardless of whether red or blue wins next week.”
In Adelaide’s inner south-west, John Cullen, principal of Raine & Horne Kurralta Park, said the prospect of changes to property taxes was influencing sales in his region.
“There is a definite correlation between investor activity and fears about what will happen after the election,” Mr Cullen said.
“The fear of missing out on negative gearing is driving some activity for buyers, while some are waiting to see who will win on Saturday week.
“Some owners are hoping for a Labor win as this will [create] a surge in investor demand for units in Kurralta Park and surrounding suburbs to lock in existing tax benefits before the end of the year.”