Leaders from across the real estate industry have united to challenge Labor’s claim that changing negative gearing will improve housing affordability.
President of the Real Estate Institute of Australia, Neville Sanders, says Labor’s contention that affordability problems can be resolved by changing negative gearing and capital gains tax rules is “quite simply untrue”.
He says: “With increases in house prices in our two largest capital cities, there have been many claims that the current tax treatment of negative gearing and capital gains of residential property is exacerbating housing affordability issues. This is simply not the case.
“Supply is the critical factor in resolving the affordability problem. Changes to current taxation arrangements will do nothing to address affordability. If anything, they will exacerbate the problem.”
Sanders says there is ample research that shows that negative gearing and the CGT discount are not driving speculative investment in housing. Instead they are adding to housing supply, with currently $7 billion a year invested in new dwellings.
Raine & Horne Executive Chairman Angus Raine says cutting negative gearing will have the unfortunate effect of driving up rents, making it harder for tenants to save for a deposit to help them get off the rental treadmill.