Property investors are in uproar over Anthony Albanese\u2019s agreement with the Greens to force through his budget with critics calling it a \u201cdodgy deal\u201d that will hurt \u201cmum and dad\u201d property investors.<\/p>\n
To secure the Greens\u2019 budget support, the Prime Minister agreed to prevent people from using a loan loophole, called Limited Recourse Borrowing Arrangements (LRBA), that allowed self-managed super funds (SMSF) to borrow money and invest in residential properties.<\/p>\n
Australians will still be able to invest in property through their SMSF, but they won\u2019t be able to borrow money to do so. Existing LRBA arrangements won\u2019t be affected. <\/p>\n
Mr Albanese has defended the move which he said affects less than one per cent of property borrowing and frees up housing stock.<\/p>\n
\u201cThese reforms will make it easier for Australians to buy their first home,\u201d he said. <\/p>\n
MORE: $3bn wiped: Aus homes vanish in Albo move<\/a><\/p>\n An LRBA has previously been one of the most tax effective methods of purchasing an investment property because super enjoys tax breaks such as 10 per cent capital gains tax when the property is sold and zero tax if retirees are aged over 60.<\/p>\n Around one in 10 SMSF had an LRBA. Buying property through super is more common in investors over the age of 50. <\/p>\n The Greens have also delayed changes to the government\u2019s plans to implement cost cuts to the NDIS bill by ordering an eight-week extension to an inquiry.<\/p>\n \u2018Dodgy deal\u2019<\/p>\n Furious backlash from investors to the changes erupted on social media, led by real estate coach Tom Panos.<\/p>\n \u201cJust when you thought it couldn\u2019t get worse, it just did. You can\u2019t believe this is actually happening,\u201d he said.<\/p>\n \u201cAustralians are looking at this and you know what they\u2019re asking?\u201d Mr Panos added. \u201cWhy would I take risks? Why would I invest? Why would I sacrifice and plan for the future if you\u2019re going to just keep changing the rules.\u201d<\/p>\n \u201cDon\u2019t forget, this is another thing the Labor government said they weren\u2019t doing a year ago.<\/p>\n \u201cNot billionaires, not corporate giants, I\u2019m talking about tradespeople, small business owners, farmers, mum and dad investors. That\u2019s the group of people that were using the superannuation fund.\u201d<\/p>\n