Australia’s property investors are still in the dark about the future of important taxation issues as the makeup of the next Federal Government remains clouded.

It had been hoped that Saturday’s election would lead to an end of the dragging debate around negative gearing and the capital gains tax (CGT) discount, but as a hung parliament looks increasingly likely investors may have to wait a significant period before being provided any clarity on the future of the tax arrangements.

For Rich Harvey, chief executive officer of, the fact that the market is set to continue speculating about the future of the tax breaks is exactly the opposite of what he hoped for.

“I would hope that we don’t have an election where it’s so close that things drag out and we have this drawn-out period before we get a result,” Harvey told Your Investment Property before voting opened.

“After an election or that sort of thing we often see a restoration period and that would be good for the market, a period where people’s confidence is restored,” he said.

While Harvey believes the current election outcome is unlikely to hold any positives for the market, not everybody believes the political environment is a reason to avoid making decisions.

“Australia seems to have this very unique situation whereas soon as an election is called everything stops. I’ve lived in places like the UK, the United States and Germany and there’s nothing like it in those countries,” Ian Hosking Richards, chief executive officer of Rocket Property Group, told Your Investment Property.

“For me, it’s always been about if the time is right for me and if I’ve done all my research and found the right property. That’s what should be important to people, not if there’s an election or something going on,” he said.

“There are some people who are quite good at delaying decisions. This time it might be the election and then in a couple of months it might be because of Christmas, they just keep procrastinating and put-off ever making a decision.”

While investors may have to wait to see what the future holds for negative gearing and the CGT discount, once a decision is made it will likely quickly play out in the market.

If Labor was to form government and were able to get its plans for the tax breaks, which would see negative gearing restricted to new builds only from 1 July, 2017 and the CGT discount halved, through the parliament Harvey believes there could be a number of investors who move quickly to enter the market.

“If we see Labor’s policy introduced I think over the next 12 months we’ll see a bit of a rush of activity as investors try to get their hands on established properties before the cut-off date in July,” he told Your Investment Property.

“Unfortunately, I also think we’ll see a lot of marketers and spruikers pop-up as they try to take advantage of the policy and attract people to off-the-plan and other new purchases because negative gearing will still be an option for those properties.”

For Amy Mylius, buyer’s advocate with Cate Bakos Property, a Liberal government retaining the negative gearing and CGT status quo could result in bumper spring selling season, particularly in Melbourne.

“At the moment there’s a real shortage of supply in Melbourne. With the uncertainty around during the election campaign vendors seem to have really been reluctant to go to market,” Mylius told Your Investment Property.

“If the Liberals do get in I think we’ll see that change and I think we’ll see and even bigger spring than usual. There’s so much pent up demand as well her at the moment that there will still be plenty of competition even if we do see huge increase in stock.”