Superannuation borrowing rules tighten under Labor-Greens tax deal

Labor has legislated changes to superannuation rules as part of a broader tax deal agreed with the Greens, closing what the government has termed a superannuation 'loophole' affecting self-managed super funds (SMSFs). According to The Guardian, self-managed super funds will be barred from borrowing to invest in residential property under the new regime.

For Cairns retirees and property investors managing their own super through SMSFs, the change represents a significant constraint on investment strategy. The region's strong property market and appeal to investors means many locals use SMSFs as part of their wealth strategy. The borrowing ban removes a tool previously available to boost property holdings within super structures.

The reforms extend beyond superannuation, with the government also legislating changes to the capital gains tax discount and negative gearing arrangements following Greens negotiations. Property investors in Cairns and across Australia face a tighter regulatory environment for structuring investment portfolios, though some economists have welcomed the changes.

Sources: theguardian.com.

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