Giving up on using the indexation lens to evaluate investments primarily will allow for a mental shift that will result in better investment choices in superior assets that produce returns that beat inflation.
The budget for this year caused some people to become quite agitated because it simplified the capital gains tax. It is evident that taxpayers were not pleased with the elimination of indexation for long-term capital gains (LTCG) in real estate transactions.
For a number of asset classes, including real estate, gold, exchange-traded funds (ETFs) that trade in gold and silver, fund of funds (FOF), foreign funds, and unlisted securities, the government lowered the LTCG tax to 12.5%. In order for the profits on all of these assets to be considered long-term, the holding time was thus shortened to 24 months (from 36 in certain situations).
