One part that I think deserves a special mention though is in response to your quote :-

“Nonetheless, the CGT discount was well received by investors and has done a lot to prop up real estate values in Australia. In the four years following the introduction of the discount in 1999, house prices have literally doubled.”

At the time the change happened (Sep 99?), a lot of mathematics were used to provide (roughly) the same result that the old Indexing method used. So, in reality, this discount was nothing new.

The Indexing method (I thought) was better, in that the total gain was “deemed” to have been earned over a 5 year period (or, if you like, only 20% of the gain was added to your Income), the marginal rate determined, and THEN the whole gain was taxed using that lower Marginal Rate. As well as that, the Indexing part allowed for Inflation, so that calculating your actual gain removed the false gain of inflation.

I think the doubling in the next 4 years of property had more to do with the previous TEN years of no growth (following the recession we had to have).

I believe the Indexation method may still be used for any property purchased prior to Sep 1999 (??) – your choice. An accountant would know.

Regards,
Benny