"HIA has always said that changes to negative gearing and capital gains tax for housing are bad policy,” said Graham Wolfe, HIA managing director.
Wolfe said that rental supply is crucial, noting 2018’s
September quarter when Sydney rents dropped in real terms for the first time
since December 2006.
"The recent additional supply of rental properties has
underpinned the improvement in rental affordability. Changing the tax treatment
on residential investment properties risks undoing the good work and lifting
rental prices,” he said.
Research commissioned by HIA and conducted by JWS Research,
revealed that 52% of the respondents believe rents will rise as a negative
impact of the changes.
HIA also found that 92% of renters aspire to buy their own home,
and Labor’s proposed changes will weigh heavily on this group’s savings plans.
"If these changes are made, rents will rise as supply dries up
due to a lack of investment in new housing. This will make renting a home less
affordable. If rents rise, renters saving for a deposit for their own home will
take a backward step,” said Wolfe.
The Labor Party plans to limit negative gearing on newly built
properties, which means that net losses, including interest cost, will be
permitted to be offset against an investors’ total taxable income. At the same
time, the tax will be payable on 75% rather than 50% of a property’s capital
These changes are anti-investment, according to Wolfe. "They
fail to recognise that private rental accommodation provides homes for almost
three million families and reducing the supply of private rental homes will
only lead to an increase in rents,” he said.
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Thursday, 9 May 2019