Experts and property industry groups claim that negative gearing that should be tinkered with to generate new income.
As the government shifts its focus to the tax treatment of rental properties, industry groups have jumped to the defence of negative gearing, describing the potential tweaks as “dangerous territory”.
Property Council of Australia’s chief of policy and housing Glenn Byrnes has been quoted saying “I think it’s a real concern they [the government] are contemplating changing negative gearing, given property is one of the few areas of the economy that’s functioning”.
With the property market slowly returning to the level where supply is catching up to demand it is thought that any alterations could radically change this foothold and impact upon investment decisions for new housing and infrastructure.
Almost two million Australians own an investment property, with some 440,000 of them negatively geared property investors living in marginal seats for the government and opposition (enough voters for these seats to change hands many times). These are predominately mums and dads investing in property to secure long-term prosperity.
Industry experts are of the opinion that the property industry already pays more than its fair share of tax with real estate specific taxes accounting for 9% of Australia’s total tax take, totaling approximately $72 billion dollars.
There are also implications to consider with commercial property with the possible reduction of business viability for landlords who rent out properties such as shops and warehouses.