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Michael Yardney Podcast

Insightful, educational and always interesting

Listen and learn from Michael Yardney, Australia’s most trusted property commentator and a group of experts as they discuss Property Investment, Success, Money and Finance to help you multiply your wealth.
While Michael is best known as a property expert, he is also Australia’s leading authority in the psychology of success and wealth creation. You’ll enjoy the way he challenges traditional finance advice with innovative ideas on real estate investing, personal finance and wealth creation. 
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Nov 26, 2018

In today’s show, I’ll answer two listener questions.

The first question is from Trent who is concerned about what will happen to our property markets if Labor Party’s proposed negative gearing and Capital Gains Tax changes are introduced.

Then we’ll answer Joanne’s question about whether you need a will.

In my mindset message I’ll talk about 20 regrets people have when they die. You may be surprised by some of them.

House prices could drop 10% if ALP policies are introduced

A report recently showed that house prices could slide by up to 9% in Sydney and Melbourne if the labor party gets into power and introduces its planned property tax changes.

A report from RiskWise Property Research assessed the potential impacts of the proposed reforms to limit negative gearing to new rental dwellings and to halve the CGT tax discount.

According to the report, an unintended consequence of the ALP policies would occur in the our national property markets where the proposed changes would be the equivalent to a sudden 1-1.5 % increase in interest rates.

This could also cause housing prices to drop by 9 and 10% in certain parts of Australia.

These proposals were first muted before the previous election, almost three years ago.

But the housing market is very different now. Falling house prices are now making homes more affordable.

Yet shadow treasurer Chris Bowen has said that the negative gearing and CGT changes are about making long-term structural adjustments rather than addressing the short-term property cycle

Another issue is that property investors will be driven to buy new properties, both apartments (which will generally be in the CBD and houses (which are likely to be in the outer suburbs.)

Both these types of property make poor investments because of their locations and will make even worse investments as, once purchased, will be established properties.

However, in the long-term, property is going to remain a great long-term investment.

Don’t allow these short-term proposed changes to not alter your long-term strategy.

Remember…negative gearing is not a property investment strategy, it’s a short-term financial position.

My strategy (and yours) should be to build as big an asset base as we can, so in the future we have choices. The bigger the asset base you have, the more choices you’ll have.

There will be many, many changes to tax and superannuation laws between now and when you retire, so don’t change your long-term strategy because of short-term ups and downs.

Do I need a will?

  • Studies have shown that at least 45% of Australians do not have a will.
  • With no will, the government will decide who gets your money according to pre-determined formulas
  • It’s important to set up the right type of will. An estate lawyer is the right person to do that for you.
  • How your assets will be distributed affects what taxes will be paid, the protection of those assets from one generation to another, and whether your assets end up where you intend them to go.
  • You should have a couple of options for executor in your will, in case one person you’ve chosen doesn’t want the job or isn’t there.
  • There are basically only four categories of people that can inherit superannuation: spouses, children, people who are financially dependent, and interdependent people. Different taxes apply within those groups.
  • Shares and superannuation can be taxed in some circumstances.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Ken Raiss Metropole Wealth Advisory

RiskWise Report – The Impact of Labor’s proposed tax changes

Some of our favourite quotes from the show:

“Another regret people had was not accomplishing enough. I guess the lesson is, start taking action.” – Michael Yardney

“Everyone’s got their own idea of what risk is, but you know when you’re living too much in your comfort zone.” – Michael Yardney

“Clearly one of the big benefits of having a will is it provides certainty on your death, it gives certainty about your wishes, how you want your assets passed on, how you want them divided.” – Michael Yardney 


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