Ian Verrender

So that gives you an advantage when you turn up to an auction, right?

And you're there.

And normally, in MAZ cases at least, investors are competing with first home buyers because they tend to look for cheaper properties that they can rent out.

And so an investor will turn up at an auction with a

potential first home buyer, they've got a tax advantage there.

They can bid more because they can afford to take a loss on the rental income and still write it off against their income elsewhere.

So that was an incentive for people with already owning a home to go and buy another property.

Now, add into that, into this equation, the change in 1999 with capital gains tax.

Now, capital gains tax was introduced by Paul Keating.

And what the original plan was, well, look,

You're going to pay tax on the capital gain, on the profit you've made on your property or on your shares or whatever.

But what we'll do is we'll take into account inflation and we'll reduce the amount of profit that you've made.

We'll take inflation out of that.

Now, that was changed to if you hold the property for more than 12 months, you get an automatic 50% discount.

Now, is that fair?

Well, you know, what about if somebody who's owned a property for 25, 30 years as a rental property?

They're only going to get the 50% discount, but as opposed to somebody who's bought one for 12 months.

So that really did add into the equation, make it, well, it made it far more attractive for people to put their money into property.

to basically buy houses and bid up the price of houses.

Now, if these changes are announced in the budget on Tuesday, and we expect that they will be, is that going to result in a big drop in property prices?