Tax Fears and Housing Crunch Spook Perth Investors

If you’ve been feeling a bit uncertain about the Perth property market lately, you’re certainly not alone. With all the speculation swirling around potential changes to Capital Gains Tax (CGT) and negative gearing, we’ve noticed a growing sense of caution among investors.

Here at You&Me Personalised Property Services, we’re seeing investors actively choose to delay their decisions while waiting to see if the government might slash the 50 per cent CGT discount.

Our co-founder, Heath Bassett, points out that these concerns have amplified recently, with the worry over how tax changes might impact long-term returns becoming a very real sticking point for many.

Heath notes that the ongoing chatter about tax reforms has led many investors to take a step back, opting to hold off on purchasing until the budget provides some concrete answers.

We’re seeing this shift most commonly with less experienced investors, who are naturally more sensitive to policy whispers and are putting their plans on hold as a result.

“They’re concerned about how changes to CGT could affect their profit when they eventually sell, especially if it pushes them into a higher tax bracket,” Heath explains.

“They’re hearing speculation about whether any changes to the CGT discount would be grandfathered, and also whether negative gearing might be restricted to just two investment properties.”

On the flip side, we’re finding that veteran investors are largely taking it all in stride. Having navigated countless policy changes over the years, they’re far less rattled by the current CGT speculation.

“They tend to focus on the long-term fundamentals and continue investing regardless of short-term conditions,” Heath notes.

And those fundamentals in Perth remain incredibly strong. Despite the current hesitancy, we expect the local market to stay largely on track. Rapid population growth and a serious shortage of housing supply are continuing to keep property prices firmly supported.

Just look at the numbers: Australian Bureau of Statistics (ABS) data shows our state’s population grew by 2.2 per cent in the 2024-25 financial year, the fastest growth rate in the country. Yet, over that same period, Western Australia completed just over 22,500 new dwellings.

“When you compare that to population growth, it highlights the imbalance. The number of new homes being built is well below the increase in people needing housing,” Heath says.

Because of these severe supply constraints, Heath explains that any reduction in buyer activity, even if CGT changes do pass, is unlikely to push prices down or materially impact the market.

“Even if a small percentage of investors leave the market, most will stay. Property still offers strong leverage and long-term growth potential compared to other asset classes,” he adds.

Ultimately, our advice is to stick to the fundamentals. Success in property comes from making decisions based on long-term outcomes, looking past the short-term noise of policy tweaks, interest rate chatter, and global events.

As we head toward the May budget, it’s completely natural to remain cautious, but the broader outlook for Perth property is still incredibly positive.

“Once there’s clarity, the market will adjust. But the fundamentals driving demand in Perth aren’t going away anytime soon,” Heath concludes.

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