Labor Re-think on Negative Gearing Possible
The federal Labor opposition will wait until after this year’s federal election to decide whether and when it will make changes to the negative-gearing tax break if it wins government.
Opposition Leader Bill Shorten has confirmed a proposed timeframe for the reforms will not be established until after the poll, likely to be in May.
Labor wants to retain negative gearing, however only for newly-built homes. The policy will be grandfathered so the changes won’t apply to existing investors. Changes to the capital gains tax percentage is also on the table.
The Coalition government argues the move would be “bad policy” that would reduce the value of people’s homes and raise rental costs.
But Mr Shorten said the changes would be a “fairness measure” and that the government was trying to distract from its own shortcomings.
“The current government is pulling a sort of pea and thimble trick, where they want you to look over here at Labor’s future policies so as to take your attention from the fact that under the current government this economy is not working properly,” he said.
Treasurer Josh Frydenberg says the there is a growing list of independent economists and property analysts warning against the concept and that most people who use negative gearing “are not rich”. He also notes that two in three people who take advantage of the negative gearing offset have a taxable income less than $80,000.
The prospect of more affordable housing prices for first-time buyers may well be desirable for a considerable proportion of the population, however removing negative gearing as a tax relaxation mechanism and forcing investment into a new and uncertain market could have greater and more far-reaching impacts than anticipated.
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The above information has been sourced from The Australian. To read the full article CLICK HERE.