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Special episode: Listener questions on new tax changes · The Money Puzzle

0:09
Speaker 1: Hello and welcome to The Australian's Money Puzzle podcast.
0:13
Speaker 2: I'm James Kirby. Welcome aboard everybody. You know.
0:15
Speaker 1: I can't remember a period where so many listeners have
0:19
Speaker 1: been confounded, confronted, confused by the tax changes. These sweeping
0:26
Speaker 1: tax changes that from the budget which relate a course
0:30
Speaker 1: to negative gearing, to capitally gains tax, to self managed
0:35
Speaker 1: superfund borrowing, and all these changes have gone through Parliament,
0:39
Speaker 1: they're through, they're coming down the line broadly unamended, so
0:43
Speaker 1: there is a lot to get across. I thought what
0:45
Speaker 1: we would do today is have a special episode of
0:48
Speaker 1: listener questions on all aspects of the tax changes. I've
0:52
Speaker 1: had lots of questions and what I've done is I've
0:54
Speaker 1: tried to select the questions that are most common right from.
0:58
Speaker 2: Listeners to the show.
0:59
Speaker 1: And if you've feel there is something that wasn't answered,
1:02
Speaker 1: send in your question the Money Puzzle at the Australian
1:05
Speaker 1: dot com dot au. It's a busy email these days
1:08
Speaker 1: and I'm delighted to see it. So who else could
1:11
Speaker 1: I have on this show to accept the challenging task
1:16
Speaker 1: of answering these questions? Except who are there? Than's Stuart
1:19
Speaker 1: Weans of the pro Solution Private Group.
1:21
Speaker 3: How are you, Stuart, I'm really well, James. Lots of
1:24
Speaker 3: great questions today.
1:25
Speaker 4: They're really insightful, and I think they're going to help
1:27
Speaker 4: us really understand how the change is going to affect
1:30
Speaker 4: investors better.
1:31
Speaker 2: Yes, I think so.
1:33
Speaker 1: And folks there you know, as always, these are real
1:35
Speaker 1: questions from real listeners. Then sometimes they'll seem random. Sometimes
1:40
Speaker 1: they'll seem maybe lengthier than they might have than if
1:44
Speaker 1: I had edited them. But I actually think they're more realistic,
1:48
Speaker 1: it's more genuine if we give you the questions as
1:50
Speaker 1: they have arrived on this occasion, because people are earnestly
1:54
Speaker 1: trying to figure figure them, figure the whole thing out.
1:57
Speaker 1: I think, just very briefly in the nightly event, you
1:59
Speaker 1: don't know. So what's happened the course is that capital
2:02
Speaker 1: gains tax, which is the main game, if you like,
2:04
Speaker 1: when you invest, particularly in property. And we'll find most
2:07
Speaker 1: of the questions are on property in today's show, because
2:10
Speaker 1: it's the number one target here for these tax changes.
2:12
Speaker 1: Capital gains tax. Basically, in the past, let's ess some
2:16
Speaker 1: you were paying a top rate of tax, Well, you
2:18
Speaker 1: had a fifty percent discount if you held an asset.
2:21
Speaker 2: Being a property or shares.
2:22
Speaker 1: For more than a year translated to something like twenty
2:25
Speaker 1: five percent. That's gone and it's only going to be
2:27
Speaker 1: indexed to inflation, which is way way lower. So capital
2:31
Speaker 1: gains tax effectively goes up negative gearing, which you used
2:34
Speaker 1: to be able to negative gear or anything you liked
2:37
Speaker 1: in property. You can only negatively gear newly built property
2:42
Speaker 1: under the new rules. And surprise, out of the blue
2:45
Speaker 1: to some people, self managed super funds until now could
2:49
Speaker 1: borrow could for years since two or eleven could borrow
2:53
Speaker 1: for residential property. It's a whole industry and that has
2:58
Speaker 1: been closed down, terminated, not allow'll do it anymore. And
3:01
Speaker 1: that was a provision laid provision in the tax changes
3:04
Speaker 1: which the government brought in because the Greens brought that
3:09
Speaker 1: up and said that's what we want if you want
3:11
Speaker 1: us to push this wider package through Parliament, to which
3:14
Speaker 1: they did. Okay, so we are going to try. We're
3:18
Speaker 1: going to take a helicopter tour of the changes and
3:22
Speaker 1: we will I think when we're finished this Stewart people
3:24
Speaker 1: will have a much better idea of how it all works.
3:26
Speaker 1: I'm going to kick off with the question from Andrew
3:30
Speaker 1: that's on negative gearing, and he says, I'm trying to
3:33
Speaker 1: get my head around the changes to negative gearing. One
3:35
Speaker 1: point remains confusing. If I purchase an existing property after
3:39
Speaker 1: the July cut off and I make a loss on
3:42
Speaker 1: my property, I can no longer claim it against my income. Nevertheless,
3:46
Speaker 1: I understand I can carry forward the rental loss, so
3:49
Speaker 1: when my investment eventually turns positively geared, I won't pay
3:53
Speaker 1: tax on rental income until the previous loss has first
3:57
Speaker 1: been neutralized.
3:58
Speaker 2: Is this current?
4:00
Speaker 1: And just to finish with the rest of that question,
4:02
Speaker 1: he says, since property is a long term investment that
4:07
Speaker 1: would eventually turn positively gear, it seems I still claim
4:11
Speaker 1: the loss. It will just come off my future rental
4:13
Speaker 1: income astead of my present employment income.
4:15
Speaker 2: Am I missing something?
4:16
Speaker 1: Let's answer that, and let's open it up and explain
4:19
Speaker 1: to people what they can and can't do anymore.
4:21
Speaker 4: Stuart, Yeah, So Andrew's correct in that you can carry
4:26
Speaker 4: forward with a loss and then that loss will offset
4:28
Speaker 4: future taxable rental income in the future whenever that occurs.
4:33
Speaker 4: But I guess there's three important observations to share in
4:36
Speaker 4: regards to that The first one is that you can
4:39
Speaker 4: still offset the loss against other rental income. So if
4:46
Speaker 4: an investor has other properties, whether they're quarantine so, whether
4:49
Speaker 4: they're pre July twenty seven assets or post you can
4:54
Speaker 4: still offset negative gearing against that income, but just not
4:58
Speaker 4: other income like business income, salary income, so forth.
5:01
Speaker 1: Which is what most people did. Of course, people don't
5:03
Speaker 1: fixed salaries. This was there one way to get into
5:06
Speaker 1: the market. This was a big tax deduction. Apart from
5:09
Speaker 1: super they could put it against their salary.
5:11
Speaker 2: We'll just make it read here. You can't do that anymore.
5:14
Speaker 4: You can't do that anymore. But I guess when forming
5:16
Speaker 4: a view around how long will it take you to
5:18
Speaker 4: utilize the carry forward losses, the question would be do
5:22
Speaker 4: you have any other property assets and how closer to
5:25
Speaker 4: being positive casual are they. The second thing you need
5:27
Speaker 4: to think about is, yes, you can carry forward with
5:29
Speaker 4: the loss, but what will your tax rate be in
5:31
Speaker 4: the future. So in ten years time, if I'm on
5:35
Speaker 4: the highest marginal tax rate today aka negative gearing is
5:37
Speaker 4: worth a lot to me, and if I carry for
5:40
Speaker 4: those losses, but then in ten years time, if I'm retired,
5:43
Speaker 4: maybe I don't have any other taxable income, so the
5:45
Speaker 4: losses really aren't worth anything to me in ten years time.
5:49
Speaker 4: But James, the most important point is the time value
5:52
Speaker 4: of money. So if we're on the second highest marginal
5:56
Speaker 4: tax rate, so thirty seven thirty nine percent, sorry, which
5:59
Speaker 4: means my taxil in comes between one p thirty five
6:01
Speaker 4: and one ninety, which would be most probably most listeners.
6:05
Speaker 4: If not they're on the top marginal rate. So a
6:07
Speaker 4: dollar of negative gearing today, if I can claim it
6:10
Speaker 4: today in this financial year, is worth thirty nine cents
6:14
Speaker 4: for every dollar of loss I have.
6:16
Speaker 3: That's the tax break.
6:17
Speaker 4: If I've got to wait ten years for that tax benefit,
6:21
Speaker 4: it's only worth twenty one cents. And more realistically, if
6:25
Speaker 4: I have to wait fifteen years, it's only worth fifteen cents.
6:29
Speaker 4: So my tax benefit diminishes so much just because the
6:32
Speaker 4: time value of money and the discount rate I've used
6:35
Speaker 4: is six and a half percent, which is really kind
6:37
Speaker 4: of the mortgage rate, which is fair right, because if
6:39
Speaker 4: you get a tax deduction, you can put that surplus
6:42
Speaker 4: into a mortgage, whether it's a home mortgage or investment mortgage.
6:45
Speaker 4: So that's the right discount to use. So yes, you
6:48
Speaker 4: can carry forward but the time value of money is
6:50
Speaker 4: going to destroy the tax benefit relative to what the
6:54
Speaker 4: settings used to be.
6:55
Speaker 1: Vers of what it used to be. Andrew Remember this
6:57
Speaker 1: is information only, not advice. So, folks, I think prompts
7:03
Speaker 1: the question if you are keen on property, which you are,
7:07
Speaker 1: you listen to the show. You have to think of
7:10
Speaker 1: it as almost like a you can't just go in
7:12
Speaker 1: once anymore. I almost so you can't, but it's very
7:15
Speaker 1: difficult to It almost insists that you are a permanent
7:17
Speaker 1: property developer, because if you stop a permanent property investor,
7:20
Speaker 1: if you just buy in once and you sell once
7:24
Speaker 1: and you had losses, well you're probably never going to
7:26
Speaker 1: get to use them, or if you get to use them,
7:27
Speaker 1: they won't be half as good as they might have been.
7:30
Speaker 1: And I suppose this is really that, this is what
7:32
Speaker 1: really hits us. I think as property investors. Now that
7:35
Speaker 1: the negative gearing is eliminated on existing property, remember that,
7:40
Speaker 1: but if the new property, you can still do it
7:42
Speaker 1: if you wish. Folks, the majority of people, of course,
7:44
Speaker 1: didn't go near a new property. They went to existing property.
7:47
Speaker 1: We might explore some finer points about this later on,
7:50
Speaker 1: but let's just leave that there Okay, so that's negative gearing.
7:53
Speaker 1: That's the main thing you need to know. Can't do
7:55
Speaker 1: it on existing property anymore, can't put those losses again,
8:00
Speaker 1: answer your salary if you are a fixed salary earner.
8:03
Speaker 1: And as I say, there was only two tax breaks
8:05
Speaker 1: really for fixed salary owners. One was super one was
8:08
Speaker 1: negative fearing. Negative fearing is it's not gone. Okay, you
8:11
Speaker 1: can still do it on shares, you can still do
8:13
Speaker 1: it on new properties, but it's gone on the most
8:15
Speaker 1: popular asset, which was existing property. Okay, a question from Jack.
8:23
Speaker 1: I feel like no one is sharing their views on
8:25
Speaker 1: the change in capital gains tax for shares. It's all
8:28
Speaker 1: about property. I actually support the changes. I think it'll
8:32
Speaker 1: help cool the market. You're right about that. You are
8:35
Speaker 1: quite right about that jacket's cooling.
8:36
Speaker 2: The market rapidly.
8:37
Speaker 1: But I cannot wrap my head around why the government
8:41
Speaker 1: pitched this as housing reform. Yes, well that was their pitch.
8:46
Speaker 1: That's the only way to explain that.
8:47
Speaker 2: One.
8:47
Speaker 1: A lot of younger Australians are investing in shares, particularly
8:50
Speaker 1: international shares, which by the way, are doing very well
8:52
Speaker 1: this year compared to everything else, but they're caught in
8:54
Speaker 1: the same net.
8:56
Speaker 2: The net outcome is worse for anyone trying to build.
8:59
Speaker 1: Well, it feels like tax reform and more like it's
9:02
Speaker 1: a tax grab dressed up as tax reform. Do you
9:05
Speaker 1: think they should have changed capital against tax across the board?
9:10
Speaker 1: Are just for housing?
9:12
Speaker 2: Okay?
9:13
Speaker 1: Great question. Originally it was thought that's what they would do.
9:18
Speaker 1: They would just change the capital against tax deal if
9:21
Speaker 1: you like the fifty percent discount after one year, they
9:24
Speaker 1: would just changes for housing. I think when they sat
9:26
Speaker 1: down at the table to try and do it, it would
9:28
Speaker 1: have turned out to be so difficult. There would have
9:30
Speaker 1: been such games being played around an arbitrage around it.
9:33
Speaker 1: They realized they just had to do it across the
9:35
Speaker 1: board if they were going to do it. So you're
9:36
Speaker 1: going to have all sorts of unintended consequences. What do
9:39
Speaker 1: you think, Stuart, It's a.
9:41
Speaker 3: Really difficult one. On one hand, you don't want.
9:44
Speaker 4: Tax legislation to influence how capital is allocated. And I
9:49
Speaker 4: guess that's a positive for an argument for removing negative gearing,
9:54
Speaker 4: because that was the argument, is that those tax settings
9:57
Speaker 4: were changing how people were allocating capital. That is, Australians
10:01
Speaker 4: were in love with investing in property negatively gearing property.
10:04
Speaker 3: So they've removed that.
10:06
Speaker 4: I guess if you had then too, regimes for two
10:08
Speaker 4: different asset classes, two different growth asset classes, when you're
10:11
Speaker 4: just doing the same sort of thing, which is not ideal.
10:15
Speaker 4: The flip side is that there's stronger consumer protections when
10:19
Speaker 4: you invest in the share market versus the property market.
10:22
Speaker 4: I mean you're probably aware of it, James. There's some
10:25
Speaker 4: buyers agents out there guaranteeing returns. They're probably not doing
10:29
Speaker 4: that anymore given these changes, but it's highly unregulated market,
10:34
Speaker 4: whereas the share market's more regulated. So you know, I
10:37
Speaker 4: don't think we really want Australians to be too over
10:41
Speaker 4: exuberant about investing in property. It's a real shame though
10:45
Speaker 4: you think about younger Australians and lower income earners, you know,
10:49
Speaker 4: people that were negative gearing was never going to suit them.
10:53
Speaker 3: It does now.
10:54
Speaker 4: The tax settings do now make it a lot harder
10:56
Speaker 4: to get started, and I don't think that's ideal. So
11:00
Speaker 4: I think maybe if they change the CGT, that's okay,
11:05
Speaker 4: but maybe they should have had some sort of provision
11:08
Speaker 4: in there to help younger Australians and lower income earners
11:12
Speaker 4: that generate some gains off investing in chairs at least
11:16
Speaker 4: to help them get started.
11:17
Speaker 1: Yes, okay, and then that is a point that's actually
11:19
Speaker 1: coming off fairly regularly. Something also we should need to
11:22
Speaker 1: say tell you, folks and Jack importantly, the treasure in
11:26
Speaker 1: putting through this package of changes. Part of it is
11:30
Speaker 1: that there is a rock bottom minimum you must pay
11:32
Speaker 1: rock bottom minimum CGT rate of thirty percent, regardless of
11:36
Speaker 1: who you are, regardless of how low your income is,
11:38
Speaker 1: regardless of whether you're retired or whatever. That's something that
11:41
Speaker 1: we have to keep will develop later in the show,
11:44
Speaker 1: and that would also be the case for trust family trust.
11:47
Speaker 1: That part of the legislation isn't done yet by the way,
11:49
Speaker 1: that's coming later, so we would just put that push
11:52
Speaker 1: that out to one side.
11:53
Speaker 2: Okay.
11:53
Speaker 1: Question from Merrick who asks, I'm hoping you could highlight
11:57
Speaker 1: a significant distress the ban on self managed super fun
12:04
Speaker 1: borrowing to purchase residential propertly. My wife and I are
12:08
Speaker 1: trustees of our SMSF. We're not wealthy. We're simply trying
12:12
Speaker 1: to build retirement fund so we don't rely on the pension.
12:16
Speaker 1: In December twenty twenty five, we signed a contract and
12:18
Speaker 1: we paid a deposit for an off the plan apartment
12:20
Speaker 1: in he mentions the place. It's Marucci door up there
12:24
Speaker 1: in lovely Queensland. Like to be up there this morning.
12:26
Speaker 1: I have to say, we're Stuart and I are here
12:28
Speaker 1: in a very dreary, rain bound gun metal gray Melbourne
12:32
Speaker 1: this morning.
12:33
Speaker 2: Okay.
12:34
Speaker 1: So our plan has always been to borrow about fifty
12:37
Speaker 1: percent through our SMSF and fund the rest through contributions.
12:41
Speaker 1: SMSI planners don't provide loan pre approvals until they close
12:45
Speaker 1: the settlement. That means we cannot complete the loan before
12:49
Speaker 1: the band takes effect, even though we've committed existing funds.
12:53
Speaker 1: Government has hinted that may be grandfathering, but there's no clarity.
12:58
Speaker 1: Families like our face, would you look financial harm? This
13:02
Speaker 1: fears that it a been changed mid game, and there
13:05
Speaker 1: are many people in the position who are extremely worried. Yes,
13:08
Speaker 1: I am sure there are, And Stuart has an answer
13:10
Speaker 1: for your America, and I hope it is to your liking.
13:14
Speaker 4: I think it will be because it's entrenched in the legislation
13:17
Speaker 4: that the commencement date of this new rule, this banning,
13:22
Speaker 4: begins forty five days after the bill receives royal assent.
13:27
Speaker 4: So it's past both houses, it'll probably receive royal ascent
13:30
Speaker 4: the next week or so.
13:32
Speaker 3: So we're probably.
13:33
Speaker 4: Looking at a start date of mid August, which means
13:36
Speaker 4: that if you signed a contract to buy and you
13:40
Speaker 4: need to borrow to fulfill that contract, and that contract
13:44
Speaker 4: was signed before mid August, you should be fine, which
13:46
Speaker 4: is great. I mean, you don't want people in a
13:48
Speaker 4: situation where they're going to lose their deposit or put
13:51
Speaker 4: them under financial stress.
13:53
Speaker 3: I think, just as a.
13:54
Speaker 4: General comment, James, around the banning of self managed super
13:57
Speaker 4: fund borrowing, on one hand, it's not deal because you're
14:00
Speaker 4: removing yet another sort of tactic or strategy to build wealth,
14:04
Speaker 4: which is gear inside your superfund. On the other hand,
14:08
Speaker 4: the thing that does please me about it, James, is
14:10
Speaker 4: that if you remove negative gearing for established property, then
14:15
Speaker 4: all that you can promote to investors is you build
14:19
Speaker 4: property outside of super or established property inside super My
14:24
Speaker 4: fear was that a lot of property sprookers would jump
14:28
Speaker 4: on the bandwagon hard sell people into setting up their
14:32
Speaker 4: own self managed super fund and buying.
14:34
Speaker 2: Which they were they had been doing.
14:36
Speaker 4: Yes, so the fact that that is closed now I
14:39
Speaker 4: think certainly doesn't help individuals necessarily, but I think from
14:43
Speaker 4: an Australian perspective, from a market perspective, I'm kind of
14:46
Speaker 4: happy that that option is now closed to the spookers.
14:49
Speaker 1: Yeah, I reluctantly concurrent degree. As you say, the bigger
14:54
Speaker 1: picture smsfs have been recovering. By that, I mean, as
14:59
Speaker 1: I said, it's been recovering. The numbers are up, the
15:02
Speaker 1: commencements are up, a suspendid way to do things if
15:06
Speaker 1: you are up to it and able for it, and
15:10
Speaker 1: many listeners in the show will aspire to do that.
15:12
Speaker 1: But it's beyond doubt that the sector was getting really
15:15
Speaker 1: tarnished by these low lifes that were in property and
15:20
Speaker 1: pushing people to open self matter superfiles who knew nothing
15:23
Speaker 1: about self matters super They were the wrong people. That's
15:25
Speaker 1: not the people we want to even to bring into
15:28
Speaker 1: smsfs at all. If they need to be protected in
15:31
Speaker 1: by people who know what they're doing. But for people
15:33
Speaker 1: who do know what they're doing, there's the price we're
15:35
Speaker 1: going to have to pay. I think this is simple
15:37
Speaker 1: as that, all right. Tim asks a question on the
15:40
Speaker 1: calculation of the capital gains tax under the proposed new system.
15:43
Speaker 1: If I buy a poorly performing investment property which doesn't
15:47
Speaker 1: increase in value and anywhere near inflation, and so it's
15:51
Speaker 1: effectively decreasing.
15:52
Speaker 2: In real value over time.
15:54
Speaker 1: But I make a modest nominal gain, Am I going
15:57
Speaker 1: to be slogged the minimum thirty percent CGT bill on
16:01
Speaker 1: the nominal gain, notwithstanding that the real value of the
16:05
Speaker 1: property has gone backwards. If so, that's absurd and very unfair.
16:11
Speaker 1: I think absurd and very unfair is what it's going
16:13
Speaker 1: to be. I don't know what your answer is, though,
16:16
Speaker 1: what's your answer?
16:17
Speaker 3: Answer is it's absurd and unfair.
16:19
Speaker 2: Yeah, yeah, that's how it's gonna work.
16:21
Speaker 3: Yeah, that's right. Indexing.
16:23
Speaker 4: Indexing cannot create a capital a carried forward capital loss.
16:29
Speaker 4: The only way you can create a carry forward capital
16:32
Speaker 4: loss is if you have a nominal loss, so an
16:36
Speaker 4: unindexed loss, which is no ideal, so.
16:39
Speaker 2: A cash lot.
16:39
Speaker 1: I'm trying to explain to people, like, if you buy
16:42
Speaker 1: an apartment and it takes away, but it's you know,
16:44
Speaker 1: it's going nowhere is costing you each year and you
16:47
Speaker 1: are making a loss in real terms in other words,
16:49
Speaker 1: of inflation is four percent. You've been wiped out every year.
16:53
Speaker 1: No compensation for that. The only loss that's relevant is
16:57
Speaker 1: a nominal loss. That is, you can prove on people
17:01
Speaker 1: that you lost cash loss. Ironically, though, you've been taxed
17:06
Speaker 1: on indexed games, so you see how they catch you
17:09
Speaker 1: on board sides.
17:10
Speaker 4: Really, yeah, So to make it clear, you're seeing Tim's example,
17:12
Speaker 4: he purchased for five hundred, the property's worth five point fifty. Now,
17:16
Speaker 4: because he purchased five hundred, let's assume the purchase after
17:19
Speaker 4: one July twenty seven, you have to index that cost base.
17:22
Speaker 4: He's saying, well, if the index cost base is now
17:24
Speaker 4: six hundred, that's what the real value of the property,
17:28
Speaker 4: then really he's got an index loss being the cost
17:31
Speaker 4: base is six hundred, but the property's only worth five
17:33
Speaker 4: point fifty. And the fair thing then would you would think,
17:36
Speaker 4: would be I've made a fifty thousand dollars loss because
17:39
Speaker 4: I haven't kept up with inflation, and I can carry
17:41
Speaker 4: that forward. So indexation can't create a loss. So essentially,
17:44
Speaker 4: in his situation, if it's a negative, it's a nil.
17:47
Speaker 4: There's a nil capital gain. If he goes and sells
17:49
Speaker 4: that property. The only way he can crystallize a carry
17:53
Speaker 4: forward capital loss is if he sells it for less
17:56
Speaker 4: than five hundred, which is what he purchased it for.
17:58
Speaker 4: And there's a lot of arguments how this works in
18:01
Speaker 4: chair portfolios as well, when you have a portfolio of
18:04
Speaker 4: winners and some losers. There's some commentary online that you know,
18:08
Speaker 4: because indexation isn't applied to the losses as well, that
18:13
Speaker 4: it can end up skewing the tax liabilities.
18:15
Speaker 1: Absolutely it can because you're you have five shares, one
18:19
Speaker 1: might like a rocket and four were losers. The four
18:22
Speaker 1: losers you really lost money on those losers, but it
18:24
Speaker 1: doesn't get covered by the new legislations. A lot to
18:27
Speaker 1: be talked through here, but I'm going to try and
18:29
Speaker 1: get through the questions because they're really good and they're
18:31
Speaker 1: so representative. Just to close this segment, it's a comment
18:35
Speaker 1: rather than a question, but it's really good. It's from
18:37
Speaker 1: Cam who says, if I was a property mogul with
18:41
Speaker 1: an a substantial portfolio that's positively geared, I can offset
18:45
Speaker 1: the losses of new inner city properties are by post budget,
18:49
Speaker 1: so the tax burden lands disproportionately on the one property
18:55
Speaker 1: held by a young investor, boxing them out. Meanwhile, I
18:58
Speaker 1: the mogul can continue to pluck the eyes out of
19:01
Speaker 1: the inner city property market with less competition, increased strengths
19:05
Speaker 1: providing a virtuous cycle for growth doesn't seem fair, just saying,
19:09
Speaker 1: says Camp. With that thought, we will leave you take
19:11
Speaker 1: your break back in a minute. Hello, Welcome back to
19:24
Speaker 1: The Australian's Money Puzzled podcast. James Kirby here with Stuart
19:28
Speaker 1: Ween's we are in a post budget show. Hey, they're
19:31
Speaker 1: all post budget shows, but we are in a post
19:33
Speaker 1: legislative budget show. How about that the negative gearing rules,
19:38
Speaker 1: the capital gains tax rules and the closure of borrowing
19:43
Speaker 1: for self managed super funds in relation to residential property.
19:47
Speaker 1: That has all passed Parliament since we talked to you
19:50
Speaker 1: last folks. It's extraordinary stuff, you know, with the scale
19:52
Speaker 1: of these changes being put through Parliament compared to the
19:56
Speaker 1: scale and pace of other changes in previous years, it's
19:59
Speaker 1: really quite dramatic. This question is from Michael. He says
20:05
Speaker 1: there's been very little coverage of the new CGT rules
20:08
Speaker 1: on the tirees, self funded retirees and low income earners.
20:12
Speaker 1: Could you explain with this new thirty percent minimum tax
20:16
Speaker 1: on capital gains where the individual has a low taxable
20:21
Speaker 1: income and maybe unused offsets for example, if an individual
20:24
Speaker 1: has a taxable income before CGT of fifteen thousand and
20:28
Speaker 1: a ten thousand net capital gain, will the offsets reduce
20:32
Speaker 1: the tax payable on the capital gain or will they
20:35
Speaker 1: still pay three thousand tax despite having available unused offsets
20:39
Speaker 1: to reduce their tax built? Okay, Stuart, just we might
20:42
Speaker 1: just take that on the top line first, really, which
20:44
Speaker 1: is the important one for most people? How is the
20:48
Speaker 1: self funded retiree or low income owner hit here?
20:51
Speaker 4: Yeah, And there's going to be some commentary about how
20:54
Speaker 4: the low income tax offset and also the pension one
20:59
Speaker 4: as well, how it's being treated in the calculation. And
21:02
Speaker 4: we can get confused because essentially now there's sort of
21:07
Speaker 4: two regimes of tax attack on ordinary income. And then
21:11
Speaker 4: the way the legislation deals with this minimum thirty percent
21:14
Speaker 4: tax is it's a separate tax calculation. We'll call it
21:17
Speaker 4: div one nineteen. We'll just have to that'll become part
21:21
Speaker 4: of the vernacular, I think.
21:23
Speaker 2: And just to clarif I do one nineteen is what
21:25
Speaker 2: exactly is it? Odd? Did it say?
21:27
Speaker 4: It's the part that deals with how we're going to
21:30
Speaker 4: tax these capital gains. So whereas it capital gains used
21:33
Speaker 4: to almost just be put all together as ordinary income,
21:37
Speaker 4: and then you could have deductions and ultimately then reduce
21:41
Speaker 4: your taxable income that year, including the gain, and.
21:43
Speaker 3: Save some tax.
21:45
Speaker 4: So I won't if there's a seven step process on,
21:47
Speaker 4: I don't propose to go through it here. I'll just
21:49
Speaker 4: tell you what the answer is and to allay some concern.
21:52
Speaker 4: So this person low income earner made a ten thousand
21:55
Speaker 4: dollars capital gain, obviously thirty percent a minimum thirty percent
22:00
Speaker 4: rate of taxes three thousand dollars, but they will get
22:03
Speaker 4: the low income earner's tax off set, which is seven
22:06
Speaker 4: hundred dollars, so they'll pay two thousand, three hundred dollars
22:10
Speaker 4: in tax. Before the minimum changes were brought in the
22:14
Speaker 4: minimum threshold rate of taxes brought in, that individual would
22:17
Speaker 4: have paid between zero and two hundred and fifty dollars
22:21
Speaker 4: of tax. So it's a ninefold increase in tax to
22:24
Speaker 4: a low income earner, but they do get to utilize
22:27
Speaker 4: the low income tax off set. The only way you
22:30
Speaker 4: can get out of the minimum thirty percent is if
22:33
Speaker 4: you are in receipt of some government payments like the
22:36
Speaker 4: age pension, job seeker a service pension. These sorts of
22:40
Speaker 4: things if you are in receipt of those, then the
22:43
Speaker 4: minimum thirty percent tax doesn't doesn't apply.
22:46
Speaker 1: So ironically, as we mentioned earlier, people are saying, we're
22:50
Speaker 1: trying to do our set mode of superfund, so we
22:52
Speaker 1: don't have pension, so we don't go on the pension.
22:54
Speaker 1: But the irony is if you had ten dollars, if
22:57
Speaker 1: you were getting ten dollars a year on the government
23:00
Speaker 1: pension and you just barely got in under the line,
23:03
Speaker 1: it would be worth applying for it because it would
23:05
Speaker 1: give you an exemption automatically to the new rooms on CDT.
23:09
Speaker 2: Is that right, and then that's right eighty percent.
23:12
Speaker 4: Or alternatively, the other way to think about it is
23:15
Speaker 4: to say this financial year, so the twenty seven financial
23:19
Speaker 4: year is your last opportunity to potentially, if you're a
23:22
Speaker 4: low income earner, potentially sell any CGT asset. So if
23:27
Speaker 4: you have a small parcel of shares that have capital
23:29
Speaker 4: gains in them, you might be better off actually selling
23:31
Speaker 4: them this year so that you avoid that minimum thirty
23:34
Speaker 4: percent rate, because if you sell them in the twenty
23:36
Speaker 4: eight financial year or beyond or after that, you're going
23:40
Speaker 4: to get caught. So anyone really that has ordinary income
23:44
Speaker 4: less than forty five thousand dollars a year taxable ordinary
23:47
Speaker 4: income less than forty five is going to be caught
23:49
Speaker 4: by the asserts low income earners, self retired, self under retirees.
23:53
Speaker 4: And also you know you need students, and these sorts
23:57
Speaker 4: of people that you know are trying to invest to
23:59
Speaker 4: get ahead end up paying nine times more tax.
24:02
Speaker 1: Just to clarify, because we are recording here on Tuesday,
24:06
Speaker 1: the thirtieth of June. When you say this financial year,
24:10
Speaker 1: you mean, which year do you mean?
24:14
Speaker 4: I mean from one July twenty six through to thirty
24:18
Speaker 4: June twenty seven. Was recording today, James. It goes out
24:21
Speaker 4: on Wednesday, doesn't it.
24:23
Speaker 2: Oh your zero caught me there? Well done?
24:25
Speaker 1: Yes, No, But to make it clear, folks, what Stewart
24:28
Speaker 1: is suggesting, should it suit you to be done in
24:31
Speaker 1: the financial year. We're talking about the financial year that
24:34
Speaker 1: closes on June thirty, twenty twenty seven.
24:38
Speaker 2: Just want to make really clear on that.
24:40
Speaker 1: Okay, Peter asks, with the new CGT on investment property,
24:45
Speaker 1: an investor whose grandfather property needs to be valued prior
24:49
Speaker 1: to June thirty, twenty twenty seven, a year from today.
24:53
Speaker 1: My question is who will be classified as a valuer.
24:57
Speaker 1: Reason for asking if it's only a registered value, I
24:59
Speaker 1: can and see a lot of properties not being valued
25:01
Speaker 1: before the end of the year, not even including the
25:04
Speaker 1: cost issue. Your thoughts please. My thoughts are that there
25:07
Speaker 1: are a piece of three thousand registered valuers with the
25:12
Speaker 1: Values Association, and I don't know how they're all going
25:15
Speaker 1: togs and value all these properties in the period that
25:18
Speaker 1: needs to be done. But having said that, everyone should
25:20
Speaker 1: get their valuation done because Stuarita would probably explain why.
25:25
Speaker 3: Yeah, well, there's two methods.
25:27
Speaker 4: You get the valuation done at one July twenty seven
25:30
Speaker 4: or use an apportionate method. But the Minister the Treasurer
25:35
Speaker 4: has to tell us what that apportionate measurement is. That's
25:37
Speaker 4: not in the legislation is yet to do that, so
25:40
Speaker 4: it's difficult. But I imagine it's going to be probably
25:42
Speaker 4: a day's days prior to of owning the asset prior
25:46
Speaker 4: to one July twenty seven, and in post that's probably
25:48
Speaker 4: going to be the method utilized. And I imagine the
25:51
Speaker 4: ATO is going to come out with some further guidance
25:53
Speaker 4: to this to tax agents and taxpayers, but their guidance
25:57
Speaker 4: at the moment is that the bonus rests on the
26:01
Speaker 4: taxpayer to come up with the evidence of how they've calculated,
26:04
Speaker 4: and then the ATO can subsequently then interrogate that evidence.
26:09
Speaker 4: The way that they look at valuations is that they
26:12
Speaker 4: say the highest level of evidence is a qualified or
26:15
Speaker 4: registered valuer.
26:16
Speaker 2: Yeah, and that's what I think, And I said the qualified.
26:19
Speaker 4: But whether you go to the extent and cost of
26:21
Speaker 4: doing that is going to depend on you know, your
26:24
Speaker 4: circumstances and what you think the compliance risk is.
26:27
Speaker 1: But would you explain to people and listeners the potential
26:30
Speaker 1: advantage of going and getting one rather than taking one
26:33
Speaker 1: off the sheriff and an apportioned method.
26:35
Speaker 4: Yeah, I think if you think the valuation is contentious,
26:39
Speaker 4: Like the next I'll come back to that, James. The
26:41
Speaker 4: next level of evidence is to get a couple of
26:44
Speaker 4: letters from a real estate agent to tell you, for instance,
26:47
Speaker 4: if we're talking about property here, or what they think
26:50
Speaker 4: the property is worth, and making sure they cite two
26:53
Speaker 4: or three comparable sales in arriving at that conclusion. And
26:58
Speaker 4: you might get two or three and if they're pretty tight,
27:00
Speaker 4: like if they're all, they're going to give you a range.
27:02
Speaker 4: But if that range is pretty tight, gives you a
27:04
Speaker 4: bit of evidence. But if that range is really wide,
27:07
Speaker 4: then then that increases the compliance risk. And in that situation,
27:11
Speaker 4: you might think, I'll go and pay for a sworn
27:14
Speaker 4: valuation to put it to bed so that I eliminate
27:17
Speaker 4: that compliance risk. The third layer of evidence that is
27:20
Speaker 4: the weakest is you know, you do your own homework,
27:23
Speaker 4: so you go and look at comparable sales, and you
27:26
Speaker 4: look at the attributes of the property, and you build
27:28
Speaker 4: some evidence yourself on what you think the asset is worth. Again,
27:32
Speaker 4: I guess it depends on your risk tolerance as a
27:35
Speaker 4: taxpayer and what advice you might get from your tax agent.
27:39
Speaker 4: But I don't think necessarily everyone is going to need
27:41
Speaker 4: to go out and pay for a sworn valuation. But
27:45
Speaker 4: it's going to depend on how much evidence you have.
27:47
Speaker 2: You know.
27:47
Speaker 4: The other issue, James, it's not ideal timing because if
27:52
Speaker 4: there is a slow down in the property market, which
27:55
Speaker 4: there already is, and I think it will continue to persist,
27:59
Speaker 4: and I think there'll be just a lockup of you know,
28:02
Speaker 4: there's not not going to be any investors in the market.
28:04
Speaker 4: That's forty percent of the market already gone. I think
28:08
Speaker 4: in the face of uncertainty, homeowners tend to not either
28:11
Speaker 4: buy or sell, so and we've seen volumes really constrict significantly.
28:17
Speaker 4: That's going to make valuations difficult because if there's not
28:20
Speaker 4: a free flowing market of a lot of comparable sales,
28:24
Speaker 4: it's going to make it really more difficult to arrive
28:28
Speaker 4: at a market value. And valuers in that situation are
28:31
Speaker 4: more likely to be conservative with their conclusions, so which
28:35
Speaker 4: is not ideal for people.
28:38
Speaker 1: It's that idea because the new tax system coming in
28:42
Speaker 1: is more severe than the old ones, so you want
28:43
Speaker 1: to have as much of your in the old system
28:45
Speaker 1: as possible. To put it simply, folks, Okay, we I
28:49
Speaker 1: think we'll take a short break and we'll be back
28:51
Speaker 1: in a moment. We have some really good questions from
28:53
Speaker 1: John and Christopher and Luiz. Okay, talk too. Hello, Welcome
29:04
Speaker 1: back to The Australian's Money Puzzle, the podcast. James Kirby
29:07
Speaker 1: here with Stuart Wiens. We've been whistling through some questions,
29:11
Speaker 1: many questions or from you the listener to the show.
29:15
Speaker 1: On the tax changes. They're random by definition, folks, so
29:19
Speaker 1: stick with us because I think if you'll find that
29:21
Speaker 1: we really get a clearer picture of what's going on
29:24
Speaker 1: through these questions, which are all genuined questions of course
29:28
Speaker 1: from our listeners. I only give the first name, which
29:32
Speaker 1: which is one thing we've always done in from the
29:34
Speaker 1: start of the show. There is one from a mainly Stewart,
29:37
Speaker 1: and then I'm going to bounce down to the final batch,
29:39
Speaker 1: which I know are They're not so much simpler, but
29:41
Speaker 1: they might be relatively more easy to answer then those
29:44
Speaker 1: first ones we had folks which were really immediately if
29:46
Speaker 1: you know what I mean, and broad based, okay, and
29:49
Speaker 1: merely a question on the CGG our question on the
29:54
Speaker 1: CGT treatment for an off the plan property purchased pre
29:58
Speaker 1: budget but settling post twenty seven. Would this be treated
30:02
Speaker 1: as a car vote eligible for the future fifty percent
30:06
Speaker 1: discount or considered grunt for My confusion is that if
30:11
Speaker 1: this is considered an existing property due to the contract date,
30:15
Speaker 1: or eligible as a new build since it doesn't exist yet. Also,
30:19
Speaker 1: would concession of super contributions no longer be able to
30:22
Speaker 1: reduce the thirty percent minimum? Okay, that last one's very
30:25
Speaker 1: tricky and extra, but perhaps you could answer the core
30:29
Speaker 1: question there, Stuart.
30:31
Speaker 4: The core question depends on the definition of new residential
30:35
Speaker 4: dwelling and in the legislation it says that the Treasurer
30:39
Speaker 4: needs to give us a definition of what that is.
30:41
Speaker 4: I suspect the answer is yes to both. That it
30:44
Speaker 4: can use the old CGT system and they'll probably get
30:47
Speaker 4: negative gearing. It'll probably fall within that definition because the
30:50
Speaker 4: definition has to the treasure has got to be convinced
30:54
Speaker 4: that it does add to housing supply, and so in
30:57
Speaker 4: this situation it would in terms of offset or reducing
31:01
Speaker 4: the tax payable. The only way you can do that
31:04
Speaker 4: is making tax douctible gifts. So superannuation contributions or any
31:08
Speaker 4: other tax.
31:09
Speaker 3: Douction won't do it.
31:10
Speaker 4: It's quarantined within GIV one, p.
31:12
Speaker 3: One nine.
31:13
Speaker 4: The only thing you can do is make a donation
31:16
Speaker 4: to a charity, and that will reduce the minimum thirty
31:19
Speaker 4: percent tax paid on the game.
31:22
Speaker 1: All right, now, next question is an important question. It's
31:24
Speaker 1: important because we sometimes forget that in answering your questions
31:30
Speaker 1: or in our sort of talking on financial issues, we
31:33
Speaker 1: forget what misunderstandings are out there. And this is shown
31:38
Speaker 1: in a question here from John who says, simple advice.
31:41
Speaker 1: We purchased our home in January nineteen eighty five. That's
31:43
Speaker 1: a vitagle and it has been our primary place of
31:47
Speaker 1: residence since. Will this be let off the changes to
31:52
Speaker 1: CGT now you see, folks, Stewart will explain your home
31:58
Speaker 1: is not involved here.
32:01
Speaker 3: Yep.
32:01
Speaker 4: You continue to claim the main residence exemption if that's
32:04
Speaker 4: your primary place of residence and you claim it as such,
32:07
Speaker 4: no capital gains tax, no change to that.
32:09
Speaker 1: There's there's no capital gain tax on your home, on
32:12
Speaker 1: your primary residence. John, that's the thing and that has
32:15
Speaker 1: not been interfered with.
32:17
Speaker 2: Is that right Stuart yet? Yeah? Okay, that's amazing.
32:22
Speaker 1: That's not to say you know, anything is possible at
32:25
Speaker 1: the moment, but for what it's worth, don't worry John.
32:28
Speaker 1: Not advice, but very clear information. Christopher. I own one
32:32
Speaker 1: property in Canberra my primary residence. I dream of relocating
32:37
Speaker 1: to Queensland. If I buy another house in Queensland and
32:40
Speaker 1: that becomes my primary residence, can I retain and negatively
32:44
Speaker 1: gear my current house in Canberra?
32:46
Speaker 2: Super question. You're onto something, Stuart.
32:50
Speaker 4: Yes you can because you own that asset. At seven
32:54
Speaker 4: thirty pm on the twelfth of May twenty twenty six,
32:57
Speaker 4: So any properties or any assets own properties. If we're
33:00
Speaker 4: talking about negative gearing, any properties owned on that date
33:04
Speaker 4: that you and the use of those assets change, you
33:07
Speaker 4: rent the amount you can claimb negative gearing on those assets.
33:11
Speaker 1: There is something in the weekend Australian and if folks,
33:13
Speaker 1: if you can have a look at it, that would
33:15
Speaker 1: be the twenty seventh of June.
33:18
Speaker 2: I did a piece on what, believe it or not
33:20
Speaker 2: is possible post the changes. That was one that you.
33:24
Speaker 1: Can You never could do this before. Certainly wasn't an
33:29
Speaker 1: investment strategy that was around before, but it will be now.
33:32
Speaker 1: But rather than going off and buying a first house,
33:35
Speaker 1: then buying a second house, then buying an investment property
33:38
Speaker 1: outside your home, people going to really think about using
33:41
Speaker 1: their home. If you were lucky enough to own your
33:43
Speaker 1: home on budget night this year, that means that property
33:47
Speaker 1: can be negatively geared. That existing property can be negatively geared.
33:51
Speaker 1: So why wouldn't you if you were thinking of if
33:54
Speaker 1: it suited you, you can turn it into an investment
33:57
Speaker 1: property and it has a privilege that is rare among properties.
34:02
Speaker 1: Now that is an existing property that can be negatively
34:04
Speaker 1: geared really interesting.
34:05
Speaker 2: We'll get more questions.
34:07
Speaker 4: Just on that to James, the thing we associate with
34:09
Speaker 4: associated debt is important to think about. So you know,
34:13
Speaker 4: if you have a home and you suspect you might
34:16
Speaker 4: rent it out in the future, what you might want
34:18
Speaker 4: to do is convert your loan repayments to interest only
34:21
Speaker 4: and just put all the money in the offset account
34:23
Speaker 4: to preserve the debt that's associated with that property, because
34:27
Speaker 4: the downside is that will still get you do get
34:30
Speaker 4: negative gearing. Like Christopher asked about, if he has repaid
34:34
Speaker 4: the loan, which is pretty common people aggressively repay their
34:37
Speaker 4: home loan, then he's got nothing to negatively gear. So
34:40
Speaker 4: preserving that debt or at least thinking about the future
34:43
Speaker 4: use of.
34:43
Speaker 1: Properties always wise. Yes, yeah, absolutely. Also I also discuss
34:47
Speaker 1: folks that though you can no longer you're super fund
34:51
Speaker 1: can no longer borrow to buy existing residential property as
34:55
Speaker 1: an investment, you and You're super fund can do a
34:59
Speaker 1: giant fan in the unit trust and you're super fun
35:04
Speaker 1: comput in the equity for a deposit, for instance, and
35:07
Speaker 1: you can do everything else that means that it can
35:09
Speaker 1: still be used. It's something times by a marginal business
35:13
Speaker 1: at the moment, but may well become mainstream. The more
35:16
Speaker 1: people realize I think about it. Okay, two quick questions, Louise.
35:20
Speaker 1: On the last year you discussed three hundred dollars claimer
35:22
Speaker 1: but for repairs on an investment property. I was wondering,
35:25
Speaker 1: when was the last time this amount was intrea space
35:27
Speaker 1: at Yeah, hey, atl have you seen the inflation figures?
35:33
Speaker 2: Did you have a look at that one? Stewarts?
35:36
Speaker 4: There's no limit on repairs, if it's a genuine repair
35:39
Speaker 4: versus improvement, there's no limit on. But what I think
35:42
Speaker 4: Louise is referring to is if you make a purchase
35:46
Speaker 4: a depreciable asset that's worth less than three hundred dollars,
35:49
Speaker 4: you can write it off in the year that you
35:51
Speaker 4: purchase that you don't have to depreciate it over its
35:54
Speaker 4: useful life. And that benchmark was said in two thousand
35:57
Speaker 4: and one.
35:57
Speaker 2: And was never indexed since.
36:00
Speaker 1: Probably ptures calculations that should be five hundred and seventy
36:03
Speaker 1: dollars by now.
36:04
Speaker 2: Hey, so good, Louise.
36:05
Speaker 1: And there's all these little things hidden across the system
36:07
Speaker 1: where they happened to index them, sometimes very controversially, like
36:12
Speaker 1: the Sophisticated Investor Test, which hasn't been indexed since. Again,
36:16
Speaker 1: I think it's at least twenty years.
36:17
Speaker 2: All right.
36:18
Speaker 1: Final one, This is from Jason in talking to Anisakavallo
36:24
Speaker 1: of the Property Group talking about the race for new
36:27
Speaker 1: property due to tax changes. All that was said just
36:31
Speaker 1: the opposite. Don't you also think land bankers, including family
36:35
Speaker 1: trust will more likely sell to developers. This is a
36:38
Speaker 1: new land, okay, in the suburban fringes of the cities
36:41
Speaker 1: for renting or owning. I agree, though hurdles for development
36:45
Speaker 1: should be reduced and please allow handy diiy craised Australians
36:49
Speaker 1: to build small, high quality kit homes. Yes, well, they
36:54
Speaker 1: weren't really thinking about that when they were putting these changes.
36:56
Speaker 1: I don't really see anything. In fact, did we get
36:59
Speaker 1: any clarification And it's all on the subdivision or Grunny
37:02
Speaker 1: Flats and all that stewarts.
37:03
Speaker 2: We still waiting on that one, still waiting on the
37:06
Speaker 2: dat's a treasurer's discretion, is it correct? One? Yeah? Okay? Correct?
37:11
Speaker 4: You know, James, you'd look to changes in New Zealand
37:15
Speaker 4: and the UK, which are both you know, the UK's
37:19
Speaker 4: cap the amount of interest that you can claim to
37:21
Speaker 4: twenty percent of the deduction, so they're limiting negative gearing
37:24
Speaker 4: if you like. New Zealand quarantined it much like they did,
37:27
Speaker 4: much like they're doing here in Australia, have done here
37:29
Speaker 4: in Australia. And there's no signs that in any of
37:32
Speaker 4: those policies that home ownership rates improve, which is kind
37:37
Speaker 4: of what you what the policy intent is proposed to do, is,
37:42
Speaker 4: you know, have more strains own their own home, which
37:45
Speaker 4: is kind of a bit counterintuitive because you think that
37:47
Speaker 4: if you give a lot of tax breaks to investors
37:50
Speaker 4: that of course that's going to pump up prices. But
37:54
Speaker 4: actually a lot of the research says that tax settings
37:57
Speaker 4: only impact prices at the margin. You know that things
38:00
Speaker 4: like supply and development restrictions and these sorts of things
38:04
Speaker 4: have a much greater impact as you know, as I
38:07
Speaker 4: think Jason's kind of alluding to. So I don't think
38:10
Speaker 4: there's really going to.
38:10
Speaker 1: Be much of a change here except that house prices
38:15
Speaker 1: are dropping, and that is one clear impact straight away.
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Speaker 1: I mean the PM has commented on it, as he should.
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Speaker 1: The clear streets undred fifty percent the big cities. Now
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Speaker 1: we see Brisbane joining in Melbourne and Sydney and softening
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Speaker 1: prices and forecasts of course, Forecaster is coming out out
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Speaker 1: doing each other with negative forecasts for the immediate short
38:35
Speaker 1: term in the property market. We will see if you
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Speaker 1: are a serious investor, these are hurdles that you will overcome,
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Speaker 1: whatever they might be through. It greatly helps by people
38:46
Speaker 1: like Stuart Williams from the pro Solution Group page Stewart,
38:49
Speaker 1: thank you.
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Speaker 2: That was a tough one.
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Speaker 3: Thanks James.
38:52
Speaker 1: You can go and have a couple of coffee. That
38:54
Speaker 1: was That was pretty demanding. Thank you very much. That
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Speaker 1: was Stewart folks. Stewart Williams of course from the pros
38:59
Speaker 1: Solution Group. Keep the emails rolling. All sorts of questions welcome,
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Speaker 1: including budget questions in particular. There's a lot of things
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Speaker 1: we don't understand. There's several things I am yet to
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Speaker 1: get on top of. But if we get a question,
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Speaker 1: if we can't answer it, I will go and find
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Speaker 1: out what the answer is, or at least the best
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Speaker 1: answer that we can get in the entire investment system
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Speaker 1: at this moment. Okay, Leah Samma glue to do today's show.
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Speaker 2: Talk to you soon.