Small businesses to lose out from proposed negative gearing changes

negative-gearing/Labor/2019-election/Denita-Wawn/Master-Builders-Australia/small-businesses/SMEs/capital-gains/housing-market/federal-government/

13 May 2019
| By Laura Dew |
image
image
expand image

More than $1.8 billion per year in repair and maintenance work on negatively geared homes could be lost if Labor goes ahead with its policy to impose restrictions on the measure.

Negative gearing allows investment property owners to offset costs against rental income and claim any loss as a tax deduction. If elected, Labor said it would restrict the benefit to newly-built homes from 1 January 2020 and halve the capital gains discount for all assets purchased after that date.

According to Denita Wawn, chief executive of Master Builders Australia, the move attacked the small businesses who carry out this repair work on the properties.

Across Australia, around $1.8 billion is spent annually on repairs and maintenance of negatively geared properties.  The biggest proportion, some $515 million, was spent in New South Wales followed by $509 million spent in Queensland.

“Thousands of small mum and dad building businesses and tradies in every city, town and region around Australia would feel the impact of Labor’s policy progressively if it is rolled out,” said Wawn.

“This work is the bread and butter of so many builders and tradies and Labor’s policy will hurt the viability of their business and will put their livelihoods at risk.”

She said the move was particularly important given the falling housing markets in cities like Perth and Adelaide.

“The next Federal Government needs to back the thousands of small building businesses who repair and maintain negatively geared investment properties, especially as the housing market softens, not bring in policies that will put their businesses at risk.”

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 3 weeks ago

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

2 months 3 weeks ago

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

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 3 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 1 day ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 6 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND