CBA Shares Slump on Tax Changes and Higher Provisions
Commonwealth Bank of Australia shares fell 10.43% as the bank increased provisions for geopolitical risks and investors reacted to federal budget changes. The government plans to limit negative gearing and scrap capital gains tax discounts, potentially slowing mortgage demand across the sector.
Commonwealth Bank of Australia lost A$30B in market value on Wednesday as shares plunged 10.43% following a disappointing earnings update and new property tax proposals. The decline marks the largest one-day percentage drop in the lender's history. Investors are reassessing the bank's "priced to perfection" valuation as higher risk provisions and slowing mortgage demand threaten future growth.
### Tax Reform Hits Mortgage Outlook Australia's federal budget introduced on Tuesday includes changes to negative gearing, limiting the tax benefit to new buildings only. The government will also scrap the 50% capital gains tax discount for assets held over a year, replacing it with inflation-indexed gains and a 30% minimum tax.
