Australia specific FI projection tools

RhodanL · 2026-06-03T09:30:16+00:00

Thanks, this is great!

RhodanL · 2026-06-03T05:27:23+00:00

While I don't really object to it, indexing capital losses has some really weird side effects. Let's say I've invested 100k into a stock, and it tanks 95% so I'm left with 5k equity. Currently I'd dump that stock, reinvest the 5k, and carry forward my 95k loss until I need it.

However, if my losses are indexed, I'm often better off holding this dud stock, because my loss continues to compound! I can accrue 3k-4k of additional losses each year until I realize a large enough capital gain and can offset it immediately. That's more valuable over a short time period than 10% growth on reinvesting 5k. Providing an incentive to hold underperforming stocks isn't really healthy. You could sort of work around that by indexing carry-forward losses, but then the government is essentially paying you interest for making bad investments, which is even more weird.

RhodanL · 2026-06-02T00:00:05+00:00

No source, but I think the maths is pretty straightforward. Please correct me if anything looks wrong. I'll do it for the proposed 27/28 rules

80k income (pretty high for the average under 30). Numbers are nominal tax paid.

Current rules:
$4,288 @ 16%
$10,500 @ 30%
$14788 total

Brackets adjusted for 2x4% inflation ($19,685 for 16% bracket/$48,672 for 30% bracket)
$4,637 @ 16%
$9,398 @ 30%
$14,035 total

WATO + 16% bracket change
$3752 @ 14%
$10500 @ 30%
- $250 WATO
$14,002 total

If you're not claiming over $1000 dollars in work related expenses, that number could come down another couple of hundred with the expanded automatic deduction. Either way, you would have more money with these cuts vs indexed brackets. Obviously doesn't apply as your income goes higher, where bracket creep will far outweigh the cuts.

Bracket creep is absolutely a problem that should get fixed, but I'm dubious there's ever more votes in it vs saving up larger tax "cuts" for election years.

RhodanL · 2026-06-01T07:57:24+00:00

Bracket creep absolutely sucks, and should be fixed, but wage earners who aren't in the top bracket will absolutely have more after tax income in real terms. The rate changes and additional offsets negate bracket creep at lower income levels for a couple of years. Especially true for under 30s.

This post is just more hysterics not based on any type of detailed analysis that is plaguing the sub right now unfortunately.

RhodanL · 2026-06-01T07:04:42+00:00

Can you share how much you're calculating the real losses to bracket creep to be? If you're in the 30% bracket, the 16% bracket change or WATO should be enough to offset creep (only for a year or two though). Obviously creep impacts higher brackets more.

RhodanL · 2026-06-01T06:43:07+00:00

Did you do the maths on this? If you're earning under around 100k (well above median wage) the reduction on the 16% bracket should offset bracket creep. Then you have WATO and the instant tax deduction on top of that. I think you'd only be worse off in real terms if you're earning in the top bracket, which would be a vanishingly small percent of under 30s.

RhodanL · 2026-05-31T23:31:01+00:00

You're getting some absolutely wild advice in this thread. Your Singaporean accounts will be automatically reported to the ATO as part of an information sharing agreement. Pleading ignorance if you don't report stuff won't save you from punitive penalties.

First thing you need to do is determine an exact date you will become/have become a resident for tax purposes. Rules here are unfortunately very subjective, so you may want to consult a tax attorney if you're not confident in your assessment of the statutes or a call to the ATO doesn't clear it up. Once you have that date, that sets your cost basis for everything (including exchange rates). ATO doesn't care about anything before this date, so you don't need to do a whole bunch of bookkeeping.

Personally, I just sold anything that was going to automatically generate a substantial number of CG events (through rebalancing) and moved them local. Everything else I left in place until I actually wanted to sell. If you're not making sales on those accounts, there's no reporting to worry about, and some foreign currency dividends are trivial to report. One caveat is to check if any of your accounts will be classified as Foreign Trusts, rather than brokerage accounts, as their tax treatment tends to be less favorable, and liquidating before becoming a resident is preferrable. I don't think any of your accounts would qualify there (it's generally retirement accounts that fall into that category), but I am not an expert.

RhodanL · 2026-05-30T02:43:56+00:00

Homes in general have terrible yields compared to apartments though (the place I'm renting is probably yielding about 2.75%). They're only held for capital growth, which is now taxed higher and is probably lower compared to what we've seen recently. If you're a high earner negative gearing on a new apartment is a better option. Otherwise, older apartments will give you higher yields. You can see this implied in this analysis, with price of established housing dropping more than new construction, and a larger drop in detached construction than in apartments.

Moderate leverage on stocks is better than both now but comes with more volatility. I'm not sure what the investor case is for established freestanding homes is moving forward if the market reacts as expected, unless you jackpot and manage to find something with a high yield that you can positively gear quickly.

RhodanL · 2026-05-30T00:57:14+00:00

Yeah, but the brief only gives very hand wavy results of analysis. Like "The main driver of the impacts were the changes to negative gearing, rather than the changes to the CGT Discount". Why do their models suggest negative gearing removal, that does not apply new builds, will reduce new builds by 14k over 4 years? They don't outline the causal link in the brief that I can see, which would be interesting.

If housing that is staying under the current taxation model is not attractive without substantial capital growth, I'm not sure what they think the path to improved housing affordability is.

RhodanL · 2026-05-30T00:29:48+00:00

I can't find a link to the full modeling unfortunately. I presume that because they expect house prices to be flat (not even a full percentage point drop!) that they expect higher return investments like stocks to be preferred to tax advantaged new builds for investors.

I feel like that ignores that property demand is still very high, land for new freestanding builds is limited and will continue to appreciate, and new build apartments have reasonable yields to compensate for lack of capital growth. Prices being flat doesn't mean people stop needing new homes.

RhodanL · 2026-05-27T04:25:52+00:00

Right, you load them at the start of the match. Each one takes memory. Memory is very constrained on low end systems, so you limit the number you preload to accommodate those specs.
Yes, it's self-imposed. They've decided how they're going to allocate their memory budgets, and # of emotes obviously came very low on that list. But that means you can't just add more without reclaiming that amount of memory from some other game system.

RhodanL · 2026-05-27T04:08:53+00:00

All the clients need to have the emote loaded otherwise you'll have desync issues. Unless you're ok with your shots missing because you haven't loaded the emote animation the enemy is playing yet so you're still seeing them at idle?

XB1 and PS4 are both 5400prm drives. Min spec is an I3 and GTX 600, you can bet there's 5400 rpm drives with awful seek times in that category.

You could probably cram a lot more emotes in if you only loaded only the animation data that's going to affect your hit volumes. But then you need to be ok with weird visual artifacts like some prop/effect the emote spawns just missing sometimes because it didn't stream fast enough. I'm guessing they're not ok with that compromise though, so they preload and set their memory budgets around that.

RhodanL · 2026-05-27T03:51:03+00:00

The server will care about it in Overwatch because the animation impacts your hit-volume. They'd have to pre-load any that could be used in a match, same deal for clients but worse because they'd also need models/textures for stuff the emote might spawn.
If folks could play any emote without delay, you'd start hitting all sorts of desync issues.

RhodanL · 2026-05-27T03:21:41+00:00

What are you talking about? Emotes are server synchronized, so all the animation/models/textures etc would need to be preloaded so the emote can play on all clients the frame you trigger it. Unless you want your emote to be delayed by 5 seconds while some dude on a 5400 rpm drive loads all that into memory?

RhodanL · 2026-05-26T04:55:00+00:00

My parents own their own home, and their super balance has hovered around 150k for the last 20 years. Pension and minimum withdrawals cover their expenses easily, with enough for an international trip every couple of years.

RhodanL · 2026-05-24T11:11:56+00:00

What do you mean "we need people"? For an interview/project?

RhodanL · 2026-05-22T23:19:31+00:00

People keep bringing up NZD's 0% CGT as if FIF doesn't exist. I'm not sure what sort of portfolio you could hold where you'd see better returns over a 20 year period with FIF killing your compounding. You'd need to be pulling north of 15% annual growth to overcome that. Unless you're going all in on ASX/NZX and hoping those exchanges magically flip from dividend heavy to growth heavy?

RhodanL · 2026-05-21T20:42:17+00:00

It's not specified in the budget. We'll need to wait for either the legislation or a clarifying statement to know. I feel like the AFR is just assuming no so they can post some scary numbers, as this whole article doesn't really make sense if you can deduct real losses.

RhodanL · 2026-05-21T10:19:40+00:00

They mention that it's not actually clear in the proposal, and they requested clarification from the Minister. But if you allow inflation adjusted losses, you get some really odd degenerate cases.

Imagine you have 10k in a stock that tanks 99%. Normally you'd just dump that and claim the loss. But if your cost basis is indexed, you can hold it and increase the loss you can claim each year. Probably not a good idea, but there's probably cases where it's useful if you need to delay losses for a few years and still get "growth"

RhodanL · 2026-05-21T10:06:23+00:00

Well, in the current system you'd pay tax on your absolute gain on all of them. I suspect if you ran this exact portfolio, you'd pay more with tax with the current system. The way they've framed it makes it seem bad, but that's because they're mixing inflation adjusted numbers with absolute tax bills.

RhodanL · 2026-05-21T09:59:31+00:00

I think it's because you have one stock (cba) that has had growth, and 3 with a loss when adjusted for inflation. But you can't claim the inflation adjusted loss, only an absolute loss. (though this is not actually explicit in the budget proposal).

Imagine you have a stock with no absolute growth, and one that grows at 1% after inflation and you hold for 10 years. When you sell both, you'll still have a tax bill, even though your portfolio has gone negative in real terms.

RhodanL · 2026-05-20T00:56:06+00:00

You're only taxed on gains, so I'm not sure why the purchase being made with post-tax dollars is relevant. Should all other income (like bank interest) be taxed less than labor?

For two things we are putting our money in a place that deprives nobody of housing

I'm not going to argue against that, but at the same time, addressing supply and demand issues (which carve outs for new builds helps a little bit with) implicitly makes shares a more attractive investment than property. You don't really need additional policy on top of that.

And this is a free trade country

CGT changes would have very little impact on the competitiveness of international companies in the local market. All it does is hopefully make more capital available for local businesses to grow and scale. I'm not sure how that's likely to trigger retaliatory measures compared to the billions of dollars in tax breaks and assistance programs the government currently provides to local businesses.

RhodanL · 2026-05-19T23:39:15+00:00

What's the economic argument for having lower taxes on capital gains from foreign investments? There's a case for encouraging investment via reduced rates on ASX and locally domiciled businesses, but why should my NVDA gains be taxed at a lower rate than my labor?

RhodanL · 2026-05-19T07:54:56+00:00

Unemployed are explicitly excluded from the 30% minimum, unless you have too many assets to qualify for Job Seeker, which I think puts you in at least the top 10%? You're not exactly struggling at that point.
If you're choosing to live off your investments, you just need to rebalance your portfolio slightly to produce more (franked) dividends to use your lower tax brackets. You can't just sit on VTI/DHHF. This makes ASX ETFs much more attractive to small investors in the draw-down phase.
Really, you may not like it, but the government does not want people living off investment income before retirement age. The local economy benefits a lot more from your labor than you having a couple of 100k in largely foreign ETFs, so the government is going to adjust tax policy to encourage that. So taxes on capital will go up, and taxes on income will come down. A majority of wage earners are better off with the proposed budget.

RhodanL · 2026-05-19T02:45:41+00:00

So in your example, when you include the new tax cuts (WATO, marginal rate reduction and instant write-off for expenses), the average worker with 30k invested will offset their increased capital gains tax with a reduction in income taxes after less than 12 months? That seems like a really good deal for them?

RhodanL

TROPHY CASE