Tom Buchanan

On the weekend I lost a best mate, my biggest supporter, the girl who taught me what love is. Being an uncle has brought so much joy into my life. You will be forever loved and missed Ahlia Jane. Hug your loved ones. Cherish every moment. Forever 7 in Heaven ❤️ #fuckcancer

@craigspeculator Not sure the point of buying an investment property simply to keep up with inflation. Risky business. You risk your capital to beat inflation and make real gains, not nominal gains.

Not sure why there is such a hoohah about the CGT changes. So now if you buy something for a million and inflation is 4% each year and 10 years later you sell for $1,480,244 you pay no tax. With the previous arrangement you would have paid tax on $240,122, am I missing something? @cjoye @JEChalmers

@bruce_kangaroo @DrCameronMurray @ForSureNotElon Can you highlight where I advocated for the differential between property and shares? I don’t think either should be changed. I simply said, if the budget is focusing on getting young Australians into homes, how does bringing other investments into those changes help that?

@tbuchanan90 @DrCameronMurray @ForSureNotElon Sure, advocating for differential capital gains tax between property and shares is fighting for every young Australian. Enough!

If you bought an investment home 10 years ago and sold it today, would you pay more or less capital gains tax under the changes in the budget? Say you bought an existing $1m home in 2016 that is now worth $1.67m (the typical national gain this decade). With the old 50% discount you pay ~23.5% of the nominal (if you start in the highest marginal income tax bracket), or $157k The new proposed indexation firstly increases the nominal base by 35% inflation, so your real gain is $320k and you pay 47% on that, or $150k So $7k less tax under the proposed new capital gains tax rules. I was surprised at the complexity of some of the proposed tax changes. But the net rate of tax doesn’t change much on average - just more tax on abnormally high capital gains, and less tax on abnormally low capital gains.

@bruce_kangaroo @DrCameronMurray @ForSureNotElon Cmon Bruce.. I’m fighting for every young Australian. ‘Housing inequality’ is the cover story for what the budget truly is, a cash grab due to the governments over spending and trillion dollar debt figure. The sooner people realise, the better off they’ll be.

@tbuchanan90 @DrCameronMurray @ForSureNotElon 3/ The ‘feel sorry for the young investor’ line run now by some in the financial markets is really, IMO, just a pathetic diversionary line to cover their own ambition to keep their own generational or specific investment management gravy train rolling.

@BevJohnst @DrCameronMurray The post above literally talks about an investment property. And my argument is that any meaningful capital gain made on any investment (outside the PPOR) will now be taxed higher.

@tbuchanan90 @DrCameronMurray There is no CGT on the family home. So that argument doesn’t apply

@bruce_kangaroo @DrCameronMurray See reply here..

@tbuchanan90 @DrCameronMurray Unrealistic. Scenario 1 estimates a 10% capital growth ex div pa. That’s 2x market CG and assumes the portfolio is liquidated at the end of ten years. Over 10years the probability of just beating the broad index with 1 stock is 20-30%. 2x AO CG prob <10%

@DrCameronMurray @ForSureNotElon So unlucky to any young investor putting in the time and effort to beat 5-6% returns? We’ll make sure the rules that were in place to help the older generation is taken from you going forward. Even though the budget was apparently solving the inequity in the housing market.

@ForSureNotElon @tbuchanan90 ASX200 has only grown about 5-6% pa over the past 20 years. Yes, some years more. But many years less.

@bruce_kangaroo @DrCameronMurray 100k invested 10% CAGR 10 years 260k return 160k profit Tax paid old rules, 37k 3% inflation for indexation; Tax paid new rules 59k 20 years 670k return 560k profit Tax paid old rules, 134k 3% inflation; Tax paid new rules 230k Both scenarios using top tax bracket.

@tbuchanan90 @DrCameronMurray I don't buy that. Av inflation over the 10yr period was 2.75% low. AI returns for the ten years were above the 30 year average. The age of the investor has nothing to do with the math. You need to distinguish between investing and short term trading.

@bruce_kangaroo @DrCameronMurray The new rules disproportionately impact younger investors building capital over decades. Older investors will have a large portion of existing gains grandfathered, while younger investors will generate most of their lifetime gains in the next 10-20-30 years under the new rules.

@bruce_kangaroo @DrCameronMurray It was your example that highlighted the return under the new CGT treatment. It works for low CAGR, high inflation scenarios. Once capital gains move into the 10%+ range, the math gets ugly for young investors.

@tbuchanan90 @DrCameronMurray Remember this is the All Ords not Accumulation. In 2016 the AO yield was 4-4.5%. Now it is 3-3.5%. So real returns well over 6.5-7% pa. Plus you are picking up imputation credits on the divi(most of the time) plus reinvestment. These are great returns both before and after tax.

@ForSureNotElon @DrCameronMurray Exactly. The example of low returns, high inflation works perfectly for the argument. But no one is risking their capital for low returns. If you’re happy with 2-3% real gains, just leave it in the bank.

@DrCameronMurray @tbuchanan90 Not for shares that grow at 7-8%+, and it’s horrible on 10-20%

@bruce_kangaroo @DrCameronMurray Sorry, I meant 3% CAGR. Not 3% total.

@bruce_kangaroo @DrCameronMurray Your example has a real gain of roughly 3%.. 6450 (inflation adjusted) investment, returning 8755 over 10 years! People don’t risk their *already taxed* income in the share market in hope of 3% real gains. It’s one example where the outcome works. Low returns, high inflation.

@bruce_kangaroo @DrCameronMurray For now. PPOR and our super will be the governments next target. Can you explain why they have implemented the same CGT changes to shares? How does that affect the housing market? The budget is simply a cash grab.

@tbuchanan90 @DrCameronMurray Its not about helping the younger generation to buy their first investment property, its about helping the younger generation buy their first family home....shelter. Principal place of residence (family homes ) are CGT free.

Now run the challenge 24 hours a day for 7 days straight. But the argument isn’t who can do it quicker for longer.. It’s that this human can now go and provide value for humanity somewhere else. It’s opportunity cost.

@XRP_the_future @ECP_Bandido @DrCameronMurray 100% The budget is simply a cash grab, while using housing inequality as the cover story.

@tbuchanan90 @ECP_Bandido @DrCameronMurray The Labor gov used the "lets help young people enter the market" as rhe Trojan horse to basically implement more taxes. Have a look at Vic State Labors 53 taxes that were introduced or increased The fed gov is following the same blue print

@ECP_Bandido @DrCameronMurray Chalmers has openly said that property was over compensated, and shares under compensated under this rule. Yet they have applied the changes to shares too. It’s an excuse. The budget had been a cash grab, using housing inequality as the cover story.

@tbuchanan90 @DrCameronMurray They've decided that getting a 50% discount on any gain simply for holding 12 months is too generous.

@ECP_Bandido @DrCameronMurray I understand that’s their intention, but why do the CGT discount changes include all investments. How does taxing shares more achieve this?

@tbuchanan90 @DrCameronMurray The changes are meant to make investment property less attractive to help young buyers get into the ppor market

@DrCameronMurray That’s fair. However I don’t believe reported CPI figures used for indexation will be an accurate measure of the real increase in cost of living or monetary debasement over time.

@tbuchanan90 If the capital gain over the next ten years is roughly the same in real terms as the last ten years, then they won't be taxed higher. That is what my example shows.

@MarkoMatvikov Extremely naive Marko. Feel like the budget has been nothing more than a cash grab, using housing market inequality as the cover story.

@tbuchanan90 And then there are those 30, 40, 50 years away.. you'd be naive to think the settings won't change over that period.

Super is increasingly the only viable investment vehicle in Australia. Setting aside the potential for losses - what happens if the government says they’re increasing the retirement age because they need you to work longer to pay more tax? Or what happens when they decide to simply tax your withdrawals in retirement after you’ve been forced to invest it there under current settings for decades? This isn’t about stomping on super - which has its merits - but to highlight the risks for future generations whose opportunities to invest are increasingly centralised under government control.