Local property bodies have come together to oppose federal Labor’s plans to make changes to negative gearing.
Local property bodies have come together to oppose federal Labor’s plans to make changes to negative gearing.
The Real Estate Institute of Western Australia, Urban Development Institute of Australia WA, Property Council of Australia WA and Master Builders Association have launched public campaigns in the lead up to the federal election to inform the public about the benefits of the current negative gearing system.
The opposition plans to only allow new properties to be negatively geared from July next year; a potential blow for mum and dad investors.
Reiwa chief executive Neville Pozzi said there was a need for conversation on the issue in the local community.
“At a time when the WA property market is softening, any proposed changes to negative gearing will be a blow to sentiment,” Mr Pozzi said.
“The WA private rental market provides over 175,000 properties, with over 60 per cent of those managed by real estate agents.”
UDIA WA chief executive Allison Hailes said the combination of negative gearing and capital gains tax creates a rational incentive for private investment into low yielding rental housing.
“This increases the pool of affordable housing that’s available to low income earners and is critical to the economy,” she said.
Master Builders director Michael McLean said the real problem contributing to declining affordable housing is that not enough homes are being built to meet demand which is forcing up the price.
“Instead of restricting negative gearing, governments would be better served in increasing the supply of affordable housing and cutting red and green tape,” Mr Mclean said.
“Forcing investors to buy newly built dwellings has some attractions to the residential building sector, but it will distort market forces and ultimately reduce the supply of housing for owners and renters.”
Property Council WA executive director Lino Iacomella said negative gearing shouldn’t be played with.
“The facts are that it makes no sense to target the one part of the economy that is contributing to growth by playing around with these tax settings,” he said.
