The 2013 long-term investing report recently released by the ASX and Russell Investments shows that over both the 10 and 20 year time frame after accounting for taxation and costs, Australian shares have outperformed residential investment property in terms of capital growth.
The result however, is close.
Over the 10-year period to December 2012 Australian shares returned 8.9%. On the lowest marginal rate, this equates to an after-tax result of 9.2%, while calculated on the highest marginal rate the result was 6.9%.
For the same timeframe Australian residential investment property returned 6.5%. After tax on the lowest marginal tax rate this equated to 5.9% while on the basis of the highest marginal tax rate this was 4.6%.
On a 20-year basis however, while Australian shares returned 9.8%, residential investment property returned 9.5%. At the lowest marginal tax rate this works out at 10% for shares and 8.6% for residential investment property. After tax at the highest marginal tax rate the returns are 7.9% and 6.8% respectively
