Opposition warned on negative gearing changes

federal-opposition/negative-gearing/

8 June 2016
| By Malavika |
image
image
expand image

Labor's proposed policy changes to negative gearing are based on inadequate economic modelling and should not be changed in isolation without a comprehensive review of the taxation policy.

That was the call from the peak body of the property industry, the Property Investment Professionals of Australia (PIPA), which said $6.5 trillion worth of Australians' wealth was in property, which was around three times the amount held in superannuation and equities.

The body's chair, Ben Kingsley, said: "Don't play with this unless you know what you're doing. Such major reform requires comprehensive and detailed modelling. Until there is real evidence to support such a policy, which industry experience tells us doesn't exist, the opposition should be very careful about changing negative gearing and capital gains tax provisions".

Kingsley said property investment contributed to self-sufficient retirees and reduced reliance on the Government to support an ageing population, while also providing one in four jobs.

"Labor's proposed removal of negative gearing on established housing is a poorly-informed policy that will drive property price reductions, increase rents, stifle new property construction, rather than encourage it and cause job losses.

"Is that a good policy?" he asked.

Tax agency business, H&R Block, pointed to Australian Taxation Office (ATO) figures in February, which showed that 72 per cent of investors with negatively geared properties earned $80,000 or less (2011-12 figures), and argued the removal of negative gearing would hit many middle income families who would have to sell their property as their tax bills rose.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks 1 day ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

3 weeks ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 6 days ago

TOP PERFORMING FUNDS