Budget Reforms Shift Investment Landscape: Experts Weigh In on Best Asset Class

The budget reforms to capital gains tax (CGT) have changed the investment landscape in Australia, with the removal of the 50% CGT discount and the introduction of an indexation-based discount. This has left many investors wondering what is the best asset class to invest in: property, stocks, or crypto?

According to Scott Phillips, author of The One-Page Investing Plan, no one knows the future, and investing decisions should not be based on tax advantages alone. He emphasizes that each asset class has its pros and cons, and investors should consider their overall goals and strategy.

Glen James, host of the Money Money Money podcast and co-author of The Quick-Start Guide to Your First Property, agrees that tax shouldn't be the primary driver for investing decisions. He notes that property is still a viable option, despite the changes to negative gearing and CGT rules. However, he warns against buying brand new properties solely for tax benefits.

Phillips also highlights the pros of investing in stocks, including the ability to diversify within this asset class through ETFs. He notes that franking credits offer a tax advantage that is not often talked about, and that investors can still negatively gear income losses incurred against shares.