Proposals to limit negative gearing and reduce capital gains tax concessions will cost a Labor Government $32 billion over 10 years, according to new research.
Modelling by the Property Investment Professionals of Australia (PIPA) has found that the Labor policies will drive investors out of the market and leave “a gaping hole” in government coffers.
PIPA chairman Peter Koulizos says the research shows that Labor’s assertion that their policy would save $32 billion over a decade is a flight of fancy when it was actually set to lose that amount because of “drastically fewer” investors in the market.
“Not only that, investors already pay almost four times in capital gains tax what they receive in negative gearing benefits over a 10-year period, so the government is already ahead financially,” he says.
The modelling found that a Labor Government could lose between $10 billion and $32 billion over 10 years, plus fewer investment properties would drive rents higher and further hinder first-home buyers from entering the market.