<\/p>\n
Mr Pocock said he\u2019d heard of anecdotal evidence from family law practitioners in the ACT.<\/p>\n
The Senator wrote to the Treasury demanding an immediate fix when parliament meets for a fortnight.<\/p>\n
\u201cThey are witnessing similar behaviour from lenders and \u2026 this is impacting family law outcomes,\u201d he said in his letter.<\/p>\n
\u201cThis is an urgent and deeply concerning development adversely impacting an indeterminate number of Australians, many by the nature of events in deeply vulnerable circumstances.\u201d<\/p>\n
Mr Pocock\u2019s staff is said to have met with Treasury officials to discuss the matter on Monday, August 3.<\/p>\n
According The AFR, the so-called widow tax affects joint owners of investment properties that are meant to be exempt from the changes to negative gearing and capital gains tax that come into effect on July 1, 2027, because they were purchased before budget night.<\/p>\n
But a full transfer of an asset to one of its co-owners because of divorce or death would be seen as an ownership change and lose its exemption.<\/p>\n
Senator Pocock said this mostly impacts women while the Coalition called it a tax on widows, divorcees and domestic violence victims.<\/p>\n
The ACT Senator tried to amend the government\u2019s initial legislation when it passed parliament earlier this year but backed down after Finance Minister Kate Gallagher and Dr Chalmers allegedly promised to clean up the loophole in the second tranche of legislation, according to The AFR.<\/p>\n
But the tax is now law and some lenders are treating it as such.<\/p>\n
Mr Pocock said the 44-year-old domestic abuse victim who wrote to him was going through a divorce and co-owns an investment property she wants to retain as part of the divorce settlement but needs refinancing.<\/p>\n
She had been pre-approved for finance before the budget bills passed parliament but has since been rejected by three banks because, under the current law, she will not be able to negatively gear it beyond July 1, 2027.<\/p>\n
She said the refusal was not due to poor credit history, property value concerns, insufficient income or being able to meet repayments, but \u201cthe application of negative gearing reforms and the way they are now being factored into lending assessments for loan serviceability.\u201d<\/p>\n
In a letter to Mr Pocock, she wrote, \u201cThe practical consequence is devastating. If I am unable to obtain finance to complete my property settlement, I may have no option other than to sell my only investment property.<\/p>\n
\u201cThis would effectively force me to lose a key retirement asset that I have spent more than 15 years building, at a time when I am already navigating the financial and emotional consequences of leaving a domestic violence relationship.\u201d<\/p>\n
Shadow Treasurer Tim Wilson accused the Albanese Government of being \u201carrogant\u201d by passing taxes Australians didn\u2019t vote for.<\/p>\n
\u201c[I]t has left behind wreckage of human casualties because deaths and divorces don\u2019t adhere to government timelines,\u201d he said.<\/p>\n
\u201cI have low confidence the Albanese Government will fix the widow\u2019s tax in the next sitting period because they only thought about how to increase revenue and didn\u2019t understand how their budget would kneecap Australians at a time of maximum vulnerability\u201d.<\/p>\n
The widow tax is said to be one of a number of unintended consequences from May\u2019s budget measures that effect middle-aged and elderly women.<\/p>\n
The measures passed with the support of The Greens after the government agreed to ban self-managed superannuation funds from using limited recourse borrowing to purchase residential property.<\/p>\n
Financial advisers said the change would unfairly impact divorced women with few assets than their super. These women were previously advised to set up an SMSF and use that super to buy a house, guaranteeing them security in retirement.<\/p>\n
Starting from July 1 next year, negative gearing will be restricted to new builds only, meaning any investors looking to buy established homes face a massive financial hit.<\/p>\n
Any established homes bought after budget night on May 12, 2026, will still be eligible for negative gearing, but only until July 1, 2027.<\/p>\n
Generous grandfathering means existing investors who already negatively gear can hang onto their tax concessions.<\/p>\n
The federal government said under the new rules, losses related to investment properties would only be deductible against other income from residential properties, including capital gains.<\/p>\n
When an investor has excess losses, they will be able to carry forward that excess to offset residential property income in future years. Enabling losses to be carried forward ensures investors remain able to claim a deduction in the future for costs such as maintenance, the government says.<\/p>\n
Meanwhile, all capital gains until July 1, 2027, will be eligible for the current 50 per cent discount, after which subsequent gains will come under the new inflation indexation regime with a minimum 30 per cent rate.<\/p>\n","protected":false},"excerpt":{"rendered":"Treasurer Jim Chalmers is being urged to fix the government\u2019s negative gearing changes after a domestic violence 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